Abstract
POJK or the Financial Services Authority Regulation is one of the official documents of the Indonesian government related to the state finance sector. Venture capital itself is one of the contributors to the economy of Indonesia, especially in terms of financing or equity participation. Therefore, regulations are needed to control the operation of venture capital businesses to avoid damages caused by problems/disruptions. Generally, the economic sector in Indonesia is highly regulated, and venture capital is not an exception. However, this paper only focuses on the analysis of the actual implementation of one of the venture capital regulations in Indonesia, namely POJK No. 35/POJK.05/2015 concerning equity participation in Venture Capital Companies (VCC), particularly, Article 35 which states that VCC must have a ratio of Equity to Paid-in Capital not less than 30%. For this research, the method of qualitative normative approach has been applied based on the secondary data concerning Business Operations of Venture Capital Companies. The results of this research show fulfillment of these implemented regulations in practice by the existing VCC and its potential.
Highlights
Venture capital has recently emerged as one of the industries that are widely targeted and favored by business actors in Indonesia, ranging from large entrepreneurs to start-up companies, Micro, Small, and Medium Enterprises (MSMEs)
Venture capital can be a solution for both prospective entrepreneurs and MSME actors in terms of financing/capital participation in the form of equity participation, purchase of convertible bonds and/or distribution of business results carried out within a specific time frame
After looking at various sources and conducting an analysis, it can be concluded that the implementation of regulations related to the venture capital businesses, especially regarding equity in POJK No35/POJK.05/2015 Article 35 in Indonesia has been fulfilled well and even maximally by Venture Capital Companies (VCC) in 2015
Summary
Venture capital has recently emerged as one of the industries that are widely targeted and favored by business actors in Indonesia, ranging from large entrepreneurs to start-up companies, Micro, Small, and Medium Enterprises (MSMEs). Venture capital takes the risk of investing in a promising business, and in the long run, VCC anticipates high returns from investee company. According to data from the Financial Services Authority (OJK) on 61 venture capital in Indonesia, the contribution of financing/capital participation reached Indonesian Rupiah (IDR) 15.82 trillion in June 2021. Looking back to 2015, the total amount of financing or venture capital participation was still IDR 6.88 trillion. This demonstrates that VCC's activities have grown significantly, as has its ability to support investee company funds. VCC's activities, investee companies’ participation/financing, must, be based on strong legal regulations governing the two parties' cooperation. Previous research studies on similar topics include the work of Nurapipah (2017), aiming to discover the impact of the implementation of property financing, partnership procedures, and sharia economic law
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