CURRENT TRENDS IN THE DEVELOPMENT OF VENTURE CAPITAL FINANCING AMIDST THE TRANSFORMATION OF THE GLOBAL ECONOMY

Abstract

This article examines current trends in the development of venture capital investment against the backdrop of the global economic transformation, taking into account international experience and the realities of Ukraine. It substantiates the nature of venture capital as one of the key instruments for financing innovative entrepreneurship, start-ups and high-tech companies, which, due to their high level of risk, often lack access to traditional sources of credit. Its functions, principles and role in stimulating the growth and structural modernisation of the national economy are identified. The dynamics of the global venture capital market and its regional characteristics are analysed. In particular, a trend of investment growth during the digitalisation period has been identified, followed by a decline in 2020-2024 under the influence of macroeconomic and geopolitical factors, with a subsequent recovery of lost ground and a transition to sustainable growth in 2025 and the first quarter of 2026. It has been established that the current stage of the venture capital market’s development is characterised by a high concentration of capital, a dominance of investments in the field of artificial intelligence, a reorientation of investment flows towards later stages of financing, and the formation of new growth sectors, particularly in the fields of biotechnology, defence and space technologies. The main instruments of venture financing are described, including venture capital funds, business angels, corporate investment, crowdfunding, accelerators and incubators. Ukrainian legislation on venture financing is analysed, in particular the regulatory framework governing the activities of joint investment institutions and venture capital funds. It is established that the Ukrainian venture capital market operates under conditions of martial law, macroeconomic instability and limited institutional support, which leads to increased risks and restrains investment activity, whilst retaining growth potential thanks to the development of the IT sector, digitalisation and integration into global innovation processes. The role of the state in shaping an effective venture capital environment through public-private partnership mechanisms, co-investment and the fund-of-funds model is substantiated, as is the need to improve the institutional environment, innovation infrastructure and the implementation of incentive policies with the aim of stimulating investment activity, reducing risks and strengthening Ukraine’s competitiveness in the global technological landscape.