Maja Vizjak

Activities of Business Angels in Croatia

Activities of business angels in Croatia started developing relatively late, after the country became independent. Under the influence of global and European investment trends, they have emerged as a new kind of informal financial investors in the Croatian economic and financial market. Their business activity in the market takes place through investing their personal funds in the economic sphere, their business activities grow in accordance with global and European economic trends, and they become increasingly important in national investments. Activities of business angels in Croatia strive to develop in the modern, economically more developed country, and they become socially and economically more important. In the past three years, foreign accelerators invested in Croatian startups. Venture capital funds and business angels have invested a total of EUR 30 million, and the biggest part of it, EUR 22.15 million came from the USA, and EUR 7.79 million from Europe. In 15 startups, EUR 5.67 million was invested in 2012, EUR 2.48 million in 2013, while in 2014, rapid growth was recorded to EUR 21.81 million. Although startups in Croatia have become more important, the investments are still small. According to the conducted research, the value of business angels’ investments in the international economy is much greater than other venture capital investments.

The Necessity of Using Foreign Capital in the Croatian Economy

Croatia, like most developing countries, is facing a shortage of capital for its economic development. Acceptance of foreign capital in the national economy should be regulated by legislative and economic regulations that would allow its unobstructed acceptance. In this process, it should be taken into account that investments should be pointed in the most favourable direction in order to encourage social development, but also ensure profit to potential investors. Foreign capital in the Croatian economy can operate in several directions: as international public capital, capital of international institutions, state capital, private capital, while in practice, there are also other forms of capital. In the present social moment, in terms of economic and legal insecurity in the country and high level of corruption, serious foreign public and private capital primarily shows interest in investing in major infrastructure facilities such as roads, ports, tourist facilities, and other facilities, and seeks to provide direct protection of the state. Croatian businessmen at lower levels of development as well as various entrepreneurs who would like to incorporate foreign capital in their business activities should make sure to use this capital in the realisation of the planned social development, and avoid foreign venture capital in the process. They should primarily demand legislation from the state that would provide them with legal and financial security of their investments. Investment experts recommend services of internationally acclaimed and reputable businesses that should be used to make investments in the country. DOI: 10.5901/mjss.2015.v6n2s5p55