INDIVIDUALS’ PARTICIPATION IN VENTURE FINANCING AS A DETERMINANT OF UKRAINE’S INNOVATION ECONOMY
Abstract
The article examines the potential of individuals’ participation in venture financing as a significant factor in the development of Ukraine’s innovation-driven economy under conditions of limited public financial resources and growing demand for private investment in high-risk innovative projects. The purpose of the study is to substantiate opportunities for expanding domestic investment potential through the involvement of non-professional investors in venture collective investment institutions as an institutional mechanism for mobilizing long-term private capital. The paper identifies key barriers that constrain individuals’ participation in venture investing, including fragmented regulatory and legal frameworks, the absence of targeted tax incentives, underdeveloped licensed digital investment infrastructure, and an insufficient level of financial literacy among the population. The author’s contribution consists in the systematization of institutional and regulatory constraints on individuals’ participation in venture funds, taking into account the specific characteristics of the national financial market and existing limitations of the collective investment system. The scientific novelty of the study lies in expanding the conceptual approach to venture financing by considering individuals not merely as passive savers, but as potentially active participants in the innovation ecosystem capable of contributing to the diversification of funding sources for startups. The methodological framework of the research is based on descriptive-analytical, structural-functional, comparative, and empirical methods, which ensured a comprehensive assessment of both institutional conditions and market practices. A comparative analysis of international models for engaging individuals in venture financing is conducted, making it possible to identify effective institutional solutions based on the combination of legal safeguards, tax incentives, and digital investment instruments that facilitate access for non-professional investors. The practical significance of the obtained results lies in the development of recommendations aimed at improving the regulatory framework and advancing institutional mechanisms for mobilizing domestic private capital to finance innovative projects, which is expected to enhance financial inclusion, reduce dependence on external funding, and strengthen the resilience of Ukraine’s venture capital market.
References
Organisation for Economic Co-operation and Development (OECD). OECD Science, Technology and Innovation Outlook 2021: Times of Crisis and Opportunity. Paris, 2021. DOI: https://doi.org/10.1787/75f79015-en
Yereshko J., Kreidych I., Kravchenko M., Kazak O., Kharchenko O. Actualization of the venture model in Ukraine. Business: Theory and Practice. 2024. No. 25(1), pp. 223–230. DOI: https://doi.org/10.3846/btp.2024.16558
Захарченко Н. В., Скляров Д. Ю., Михайлова Д. С. Проблеми та перспективи венчурного інвестування в умовах неоіндустріального розвитку та ІТ-підприємництва в Україні. Схід. 2020. № 3(46). С. 160–178. DOI: https://doi.org/10.18524/2413-9998.2020.3(46).214232
Лях I. Можливості венчурного фінансування в умовах інтеграції України до європейського інноваційного простору. Економіка і суспільство. 2020. № 2(39). С. 75–79. DOI: https://doi.org/10.37405/1729-7206.2020.2(39).75-79
Литвин І.В., Шевчук К.С. Венчурний бізнес в Україні: сучасний стан та передумови розвитку. Менеджмент та підприємництво в Україні: етапи становлення і проблеми розвитку. 2022. № 2. С. 394–401. DOI: https://doi.org/10.23939/smeu2022.02.394
Martino P., Bell R. G., Rasheed A. A., Bellavitis C. Entrepreneurial Finance and Governance. Oxford Research Encyclopedia of Business and Management. 2022. DOI: https://doi.org/10.1093/acrefore/9780190224851.013.384
Українська асоціація венчурного капіталу (UVCA). Аналітичні огляди венчурного ринку України. URL: https://uvca.eu
CASE Україна. Аналітичні матеріали з питань фінансової інклюзії та інвестування. URL: https://case-ukraine.org.ua
Dealroom. Міжнародна платформа аналітики стартапів. URL: https://dealroom.co
Dykha M., Dykha V., Gonta S. Development of the startup industry in Ukraine: status, challenges, perspectives. Deleted Journal. 2024. № 2. С. 45–54. DOI: https://doi.org/10.32782/city-development.2024.2-6
GOV.UK. Seed Enterprise Investment Scheme (SEIS). URL: https://www.gov.uk/government/publications/seed-enterprise-investment-scheme-income-tax-and-capital-gains-tax-reliefs-hs393-self-assessment-helpsheet
U.S. Securities and Exchange Commission (SEC). Regulation Crowdfunding. URL: https://www.sec.gov/resources-small-businesses/exempt-offerings/regulation-crowdfunding
Republic of Estonia. e-Residency Programme. URL: https://www.e-resident.gov.ee
Українська асоціація інвестиційного бізнесу (УАІБ). Ринок у цифрах: структура активів інститутів спільного інвестування станом на 30.09.2025 р. URL: https://www.uaib.com.ua
Organisation for Economic Co-operation and Development (OECD). (2021) OECD Science, Technology and Innovation Outlook 2021: Times of Crisis and Opportunity. Paris. DOI: https://doi.org/10.1787/75f79015-en
Yereshko J., Kreidych I., Kravchenko M., Kazak O., Kharchenko O. (2024) Aktualizatsiia venchurnoi modeli v Ukraini [Actualization of the venture model in Ukraine]. Business: Theory and Practice. no. 25(1), pp. 223–230. DOI: https://doi.org/10.3846/btp.2024.16558
Zakharchenko N. V., Skliarov D. Yu., Mykhailova D. S. (2020) Problemy ta perspektyvy venchurnoho investuvannia v umovakh neoindustrialnoho rozvytku ta IT-pidpryiemnytstva v Ukraini [Problems and prospects of venture investment under neo-industrial development and IT entrepreneurship in Ukraine]. Skhid – East, no. 3(46), pp. 160–178. DOI: https://doi.org/10.18524/2413-9998.2020.3(46).214232
Lyakh I. (2020) Mozhlyvosti venchurnoho finansuvannia v umovakh intehratsii Ukrainy do yevropeiskoho innovatsiinoho prostoru
[Opportunities for venture financing in the context of Ukraine’s integration into the European innovation space]. Ekonomika i suspilstvo – Economy and Society, no. 2(39), pp. 75–79. DOI: https://doi.org/10.37405/1729-7206.2020.2(39).75-79
Lytvyn I., Shevchuk K. (2022) Venchurnyi biznes v Ukraini: suchasnyi stan ta peredumovy rozvytku [Venture business in Ukraine: current state and prerequisites for development]. Menedzhment ta pidpryiemnytstvo v Ukraini: etapy stanovlennia i problemy rozvytku – Management and Entrepreneurship in Ukraine: Stages of Formation and Development Problems, no. 2, pp. 394–401. DOI: https://doi.org/10.23939/smeu2022.02.394
Martino P., Bell R. G., Rasheed A. A., Bellavitis C. (2022) Entrepreneurial finance and governance. Oxford Research Encyclopedia of Business and Management. DOI: https://doi.org/10.1093/acrefore/9780190224851.013.384
Ukrainian Venture Capital and Private Equity Association (UVCA). Analytical reviews of the Ukrainian venture capital market. Available at: https://uvca.eu
CASE Ukraine. Analytical materials on financial inclusion and investment development. Available at: https://case-ukraine.org.ua
Dealroom. International startup analytics platform. Available at: https://dealroom.co
Dykha M., Dykha V., Gonta S. (2024) Development of the startup industry in Ukraine: status, challenges, perspectives. Deleted Journal, no. 2, pp. 45–54. DOI: https://doi.org/10.32782/city-development.2024.2-6
GOV.UK. Seed Enterprise Investment Scheme (SEIS). Available at: https://www.gov.uk/government/publications/seed-enterprise-investment-scheme-income-tax-and-capital-gains-tax-reliefs-hs393-self-assessment-helpsheet
U.S. Securities and Exchange Commission (SEC). Regulation Crowdfunding. Available at: https://www.sec.gov/resources-small-businesses/exempt-offerings/regulation-crowdfunding
Republic of Estonia. e-Residency programme. Available at: https://www.e-resident.gov.ee
Ukrainian Association of Investment Business (UAIB). Market in figures: structure of collective investment institutions’ assets as of September 30, 2025. Available at: https://www.uaib.com.ua
