Issues With Financing Innovative Activities

The creative evolution of a society (or a nation) is an ongoing activity in the twenty-first century. The best possible financing sources and policy implementation are critical to the success of developing, implementing, and sharing innovations. Therefore, the state's role in regulating, promoting, and coordinating creative science and technology is strengthened when innovative activities are properly organized and funded in an objective manner. The availability of funding sources for creative endeavors and the hazards involved will be the main topics of this essay. The essay emphasizes the fundamentals of innovation finance in order to solve the issues brought up in the areas of innovation and funding inventive activities. Own money, foreign investments, venture capital, equity financing, private charity gifts, so-called business angel’s funds, borrowed funds, forfaiting, factoring, and other sources are among the primary sources that are examined and generalized. The article thoroughly discusses the needs, limits, benefits, and drawbacks of the sources listed, based on the study, comparison, and SWOT analysis of those sources. In the work a great attention was paid to foreign investments as one of the important sources of innovative business financing. Attracting foreign investments in national economics for financing innovative programmes faces a number of challenges that is caused by low financial international rate; as well as by instability of a country’s important political, economic and innovative legislative base. The article gives some modest recommendations in implementing the main forms of foreign capital in innovative sphere, namely, according to the author’s opinion, the following forms of investments should be paid more attention in national economics: • Investments in the form of state loan, formed in the form of state debt, bonds of the foreign states and international financial institutions; • Investments in the form of the share in the share capital of the local organizations; • Investments in the form of investments in securities, including in the form of state, corporations and institutional issuers; • Foreign credits; • Licensed credits providing national economy (organizations), through relatively modern technique and technologies; • Financial credits in the local organizations; • Favorable conditions for entering knowledge-intensive technologies. Consequently, a number of suggestions and recommendations are made for the creation of a successful system for funding inventions and creative endeavors. Keywords: own funds, attracted funds, borrowed funds, financing sources, leasing, business angels, venture capital.