One of the most interesting features of the venture mechanism is the phased financing of risky entrepreneurial projects (Fig. 3). The division of financial flows into stages is caused both by the desire to reduce the financial risk of investors in case of deviation from the planned project implementation plan, and by the need to attract additional funds as they successfully move forward towards the goal.

The first step in most new projects is seed funding. At this moment, the entrepreneur needs financial support to carry out work on the theoretical and practical justification of the commercial significance of his idea. He himself or a small team under his leadership carries out preliminary research and development, evaluates the potential market for new products, and prepares a plan for the future company (the “business plan”). The seed funding phase can last from several months to one year and requires an average capital investment of up to $300,000. This is the most risky investment, since there is practically no reliable information to determine the viability of the proposed project. According to one estimate, at the end of the considered stage, about 70% of new ideas are discarded. At the same time, the accepted ideas bring investors who entered the business at the stage of pre-start financing the highest profit - according to various estimates, from 50 to 75% per annum.

If the first stage is completed successfully, the stage of start-up financing (start up) begins, at which work on the organization of a new company and the selection of its main employees is almost completed, the development and testing of a prototype of a new product, technology or type of service is nearing completion, and a study of needs is carried out. market. The firm's management already has a formal business plan that serves as the basis for negotiating with new venture capital investors—the firm needs funds to launch and market its products. In some cases, additional research and development costs may be necessary. The seed funding stage takes from six months to several years and usually costs investors between $1 million and $3 million. Due to the high degree of risk, joint investments by several venture capital investors are often practiced.

The stage of initial expansion (early expansion) is associated with the transition of an innovative firm to the practice of releasing a new type of product or commercial development of a new type of service. At this time, the company needs advertising, strengthening its reputation with consumers, overcoming competition, creating a sales network for marketable products, organizing and improving production management. Profits from the sale of products do not yet provide at this stage the necessary financial opportunities for further growth, payment of current expenses and the creation of working capital. At the same time, the company's existing assets do not serve as a reliable guarantee for obtaining loans from commercial banks. Thus, entrepreneurs are again forced to resort to the services of venture capital investors. The initial expansion phase can take several years and requires several million dollars to keep the new firm running smoothly. Therefore, several venture funds usually take part in financing innovations.

If the initial expansion stage is successful, it is followed by a rapid growth stage, in which the new firm needs significant funds to increase production capacity, working capital, improve the marketing system, and also to improve products.

Once a new firm has reached the stage of rapid expansion and is making a profit, the likelihood of bankruptcy is greatly reduced. Now she can use borrowed funds from traditional financial sources. Attraction of new investors of risk capital, as a rule, stops. Conditions are being prepared for the issuance of shares of the new company to the securities market. The preparatory phase (mezzanine) can take up to three months and costs $300,000 or more.

The ultimate goal of venture capital investors is the onset of the liquidity stage, i.e. sale of the shares of an entrepreneurial firm received in exchange for investment in some interested large company or their initial placement on the stock market. To facilitate the sale of shares of new firms that do not yet have a strong reputation with a wide range of potential buyers, an over-the-counter securities market (officially referred to as the National Association of Stock Dealers Autoquote System - NASDAQ) has developed in the United States. The conditions for entering it are simpler compared to traditional stock exchanges, for example, New York, so small and medium-sized firms in most cases are guided by this particular market. In 1994 

4902 companies were listed here, while on the New York Stock Exchange almost half as many - 2570 companies7. The NASDAQ market is not localized in any particular place and operates with securities throughout the country. A computer network is widely used to process and distribute the necessary information, and transactions between brokers are carried out via telecommunication channels.

Risk investments have also been used to acquire control over new firms or corporations through the replacement of their management in the event that, due to the weakness or incompetence of management personnel, it is not possible to properly develop existing opportunities. It can also be the other way around: with the help of venture capital, managers want to buy back part of the shares owned by investors and thereby strengthen their positions within the company or ensure the separation from a large corporation of some subsidiary, from the point of view of the long-term strategy of the corporation.

The bulk of risky capital investments (about two-thirds) usually falls on the first three stages of venture financing. Although these investments carry the greatest risk, they tend to yield the highest rate of return if the projects are successful.

The duration of the full cycle of risky investments in one firm is in a very wide range. There are examples when less than 3 years have passed from the moment of the company's inception to its registration on the stock exchange. However, in most cases this period takes 5-10 years. Thus, an indispensable condition for risky investments is the provision of funds without paying interest and repaying the debt for a sufficiently long period of time.