Head of investment company Capitalia Juris Grisins

Each million invested by a venture capital fund creates 50 new jobs, says Juris Grisins, Board Chairman of Latvian Venture Capital Association and head of investment company Capitalia. He also points at the Latvian Achilles’ heel in the competition with the neghbouring countries – it is difficult to single out a sector Latvia could stand out with among the Baltics. However, energy sector has managed to attract investors’ interest.

Economists stress Latvian economic recovery mostly depends on investors. To what extent can they boost the recovery and is it really the key factor?

Influx of new resources definitely does stimulate it. New investments boost creation of jobs and ensures growing consumption. Latvian Venture Capital Association study suggests each million invested by a venture fund creates 50 new jobs and boosts the turnover and profit three to four times.

What is the main thing attracting foreign investors to Latvia?

Foreign investors are mostly interested in huge investments (above 10 million). Similalry, they are also interested in sectors with great future prospects. They do care also for the geographical location, lower costs and the pace of the economic recovery, which, despite fluctuations, is nearing the European Union’s average rates.

Which sectors do investors favour the most and which are neglected?

Recently, it is energy sector attracting interest. At the moment, it is difficult to single out other economic sectors receiving special attention from the part of investors.

Are there any sectors Latvia, compared to the rest of the Baltics, reports the best performance? And which ones account for our Achilles’ heel?

Unfortunately, it is hardly possible to find a sector Latvia can stand out with, which could be one of the country’s Achilles’ heel. Estonia is the most active in terms of investments and international development of businesses. They also have the most active stock market to serve as an investment and finances hub in the Baltics.

What is the share of venture capital projects in Latvia. Have venture investors become more active after the crisis?

Latvian venture capital funds carried out slightly less than 10 venture projects in 2010. Companies have been slow to make use of these funds and loans still rank among the most popular means to finance business activities.

However, compared to 2008 and 2009, venture funds activity has surged in 2010.

In terms of local investors, how active are they and which sectors do they favour?

Judging from the number of deals, they are definitely the most active investors of their own capital. Projects asking for relatively little funds (5-50 000 thousand lats) have gathered popularity. Regarding specific sectors, it is those that are comparatively easy to manage (pubs, hairdresser’s) and the ones with great future prospects (the Internet).