THE STRATEGY OF ATTRACKTING VENTURE CAPITAL AND PRIVATE EQUITY IN SERBIAN MARKET ENVIRONMENT

Abstract

When it comes to financing business entities in Serbia, it should be pointed out that the financial system of Serbia is predominantly based on banking institutions as bearers of financial activity. A small amount of the financial flows comes from other, specific, forms of financing such as leasing, factoring, financing through venture capital and private capital. The biggest problem for SMEs, as well as entrepreneurs, is that in the initial years of business they do not have enough amount of assets that would serve as collateral for bank loans. Developed countries have been applying venture capital and private equity as a solution to this problem for a long time ago. The aim of this paper is, using the unpublished results of research of the first author in her PhD thesis, to determine the potential direction of investment of private equity and venture capital by analyzing the economic sectors. Namely, the prediction of potential sectors can be the first step in developing a strategy for attracting venture capital and private equity in Serbia.