The Role of Venture Capital on the Hungarian Capital Market and the Current Situation in Hungary

The venture capital has a decisive role in development, based on innovation and on advanced technology. The capital market is capable of choosing and capitalising the perspectival, innovative enterprises at the early stage. The more and more realised in Europe the effective economic influences of the investment of the venture capital. The venture capital invested 1 billion US Dollars in Hungary until the end of 2000 and almost half of it went into companies with more than 500 employees, while in Western Europe investments occur at companies with less than 100 employees. Over the last years there can be seen an increasing interest for the new companies of technological base, which show novelties and which are at ir early stage of their development. In Central-Europe, Hungary was the first place where there has been created such a law which established a legal frame for venture funds, for trustees and corporations in order to promote the development of venture capital market. Venture capital: is one of the products of financial innovation which aim is to help companies who have good ideas but they lack the capital. The definition of venture capital can be described in many ways depending on the phase of the project and respectively, on the project’s size. Objectives of my article is to describe the role of the venture capital in the advanced market economies and to draw up where Hungary is in the realisation of this project.