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Angel investors as a method to revitalize investing activities

Vol. 25, Iss. 4, APRIL 2019

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Received: 12 March 2019

Received in revised form: 26 March 2019

Accepted: 9 April 2019

Available online: 26 April 2019

Subject Heading: INVESTING

JEL Classification: G31, G38

Pages: 945–954

Savin S.Yu. Financial University under Government of Russian Federation, Moscow, Russian Federation

Anisimova A.I. Financial University under Government of Russian Federation, Moscow, Russian Federation

Subject The article discusses the role of venture investors, which are called angel investors. Innovative and diversified economy is indispensable without the comprehensive development and assistance to angel investors, including governmental methods for encouraging business angels' activities, tax incentives.
Objectives The article provides our summary of international business angels' practices and guidelines for regulating the tax treatment of business angels and creating favorable conditions for them to operate today.
Methods We prove the reasonableness, reliability and soundness of our recommendations by investigating the development of business angels' activities abroad and in Russia from regulatory and comprehensive perspectives. We also resort to retrospective, systems and functional-structural analysis, observation, classification, tool-based techniques for grouping, sampling, comparison and generalization, evolutionary and trend analysis.
Results We review key issues and their solutions in terms of favorable conditions for revitalizing business angels' activities in Russia. The taxation systems and preferential tax treatment of private venture investors undergo the reforming process in accordance with the current global practices. However, it seems disputable to focus on tax benefits for private professional investors only. We justify the adoption of standards for qualifying private investors as angel investors, elevating the investment and legislative culture, encourage the confidential business partnership and reduce the monopolization in certain economic sectors.
Conclusions There should be a comprehensive program for creating favorable conditions for business angels in the Russian Federation, supporting the performance of regional associations of business angels and facilitating the enforcement of tax incentives to private investors.

Keywords: angel investor, business angel, venture finance, investment, tax deduction


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