If he also possesses expert knowledge of the risks that accompany investing in startups, he has fulfilled the requirement to be registered in the Register of Subjects of the National Innovation System.
The Management Board of the Fund for Innovation Activities adopted the Rulebook on the Register of Subjects of the National Innovation System, which establishes the conditions for entry and deletion from the Register.
A startup can be registered in the Register if it is registered as a business company or entrepreneur based in Serbia, and no more than 10 years have passed since its establishment and no more than five years since the first business income was generated. Bankruptcy or liquidation proceedings cannot be conducted against a registered startup.
An additional requirement for startup registration is that research and development costs accounted for at least 10 percent of total expenditures in each previous year. If the applicant does not have a financial history, the commission, formed by the Fund, assesses whether an innovative product, service or technology is being developed and whether it has the potential for rapid and large growth, it is stated in the Rulebook, which was recently passed.
Business angels who possess appropriate professional knowledge on the basis of which they can understand the risk of investing in a startup can also be registered in the Register. They can be registered only if they have invested in one or more Serbian startups, in the last three years, in the amount of at least 5,000 euros.
The idea is to find all the key actors of the domestic innovation system in this unique record. For business angels, this would in the long run mean the possibility of obtaining various types of benefits, primarily tax benefits, for investing in good innovative ideas.
Business angels have been present all over the world for a long time and they are usually people with rich business knowledge and experience, who invest their own money in promising startups. Most often, they invest in the initial phase of development, when young entrepreneurs with a good idea face the problem of not being able to get initial financing from banks, not having their own money, or being able to borrow from someone.
Angel investments in a startup usually range from 20,000 to 500,000 euros, and the practice in the world is for them to take a share in the company’s capital in the range of 10 to 30 percent, and it comes out of ownership around the fifth year.
The “Serbia Innovira” project, which is jointly implemented by the American Agency for International Development, ICT Hub, and the “Digital Serbia” Initiative, has published a Guide for angel investing in Serbia, in order to help potential business angels and startups to better understand the advantages and the process itself angel investing, as well as different options for investing from a tax and legal perspective.