G20 YES: Yoanna Gouchtchina of IAG discusses her start-up

Modern Russia spoke with several young Russian entrepreneurs who are driving the innovation and modernization of the Russian economy at the G20 Young Entrepreneur Summit in Nice, France.  

Below is an interview with Yoanna Gouchtchina, managing partner and general director of Investment Advisory Group, a private investment firm with offices in Moscow and New York.  IAG specializes in capital raising, starting businesses and implementing investment projects throughout Russia.  IAG has attracted more than $200 million of investments to the Russian and CIS market since the start of its operations.  

Tell us about your company. What inspired you to start your own business?

The early 2000s marked an investment boom in Russia and an inflow of foreign direct investment. At the time, legislation was rewritten to accommodate Russia's adjustment to global norms and standards relevant to trade and investment. While changes were happening quickly, implementation was falling behind. A number of foreign companies struggled with "localization" of their companies in Russia, and faced issues in everything from customs clearance of equipment to searching for the right partners with which to develop a production facility in Russia. 

At the end of 2003, I started to work in Russia for a U.S. consulting firm based in Washington D.C. on managing their contracts under the World Bank program of Russian customs modernization. While working with a number of foreign stakeholders, I realized that there was an unfulfilled demand for investment assistance services. By the end of 2005, Investment Advisory Group International LLC (further IAG) was born. 

As the head of an investment advisory company, what do you see as the best opportunities for investment in Russia?

If we disregard the obvious picks in Russia's natural resources and commodities sectors as perspective investments, then I would select two of the most attractive industries: pharmaceutical development and manufacturing, and Internet-related commerce. Both of these areas have great potential due to the availability of highly trained scientific and technical personnel and a relatively unsaturated market. 

IAG, in its role as founder and co-investor, is in the process of finalizing a $55 million deal to construct CEDIS, a pharmaceutical testing center in Russia in partnership with the Russian Corporation of Nanotechnology. CEDIS just recently received the status of being an Innograd Skolkovo resident. We are in the process of transferring all standards of operations for this center from our U.S. partner, a large American research organization. Once completed, it will be a state of the art, world class facility, which will enhance the position of Russian pharma on a global scale and create new opportunities.   

Internet startups are no less fascinating. For Russians or foreign entrepreneurs working in Russia, the sky is the limit in this field. The entrance barriers are very low, including competition and startup costs. Corruption is non-existent as government authorities have yet to figure out their Internet commerce-related policy, and the West is full of ideas that can be made local in Russia. I am a newcomer to this field but see great opportunities, such as fast aggregation of users (i.e. Facebook, Groupon) and the ability to open up geographic identity (i.e. Google, Wikipedia). As a result, I am finalizing the assembly of a new team to deal solely with Internet startups and we already launched the development of one project.  At the same time we are looking at other projects to invest in at a seed stage. 

What has been your experience as a woman in the investment field in Russia? 

Business is a man's world and Russia is a great example of that. However, Russia is also a country with a high concentration of highly educated women, not only locally but globally. I am not sure if the men in Russia are falling behind or if women are becoming more active, but there is a clear trend of growing female entrepreneurship in Russia. My experience as a young woman entrepreneur in Russia has been very positive for two reasons: the right partnerships and a fearless attitude that I developed during my nine years of living, studying and working in the land of dreams – the United States.  I consider myself a global person, but my experience as a female entrepreneur in Russia has so far been most challenging and inspiring. 

Why should someone invest in your company?

While we are not looking for investment into IAG, we are raising additional funds for our portfolio projects. There are three reasons to invest in our initiatives: 

1. We are a team of dedicated professionals. 

2. IAG always has a niche market concept. 

3. We have global standards and use a local approach.  

How have you experienced the modernization of the economy?

As mentioned before, my first job after coming back to Russia was a modernization effort in the area of the Russian Customs Service in preparation for Russia's WTO accession. With a graduate degree in commercial diplomacy, it was the right challenge. 

Then, and partially now, Russian government authorities understood the concept of knowledge transfer and used every opportunity they could to bring in foreign experts. In my experience there are not enough training and professional exchange programs today and they are more often than not sponsored by other governments.  I call upon the Russian government to do more in this space because knowledge transfer is a very important part of modernizing the economy.  

What do you see as the next steps for continued modernization of the Russian economy?

Any real modernization of Russia depends on its entrepreneurs.  There is no government that can do it for us, and as long as there is a growing entrepreneurial class in Russia the country will move forward. What the Russian government can do is cut down on corruption, red tape and fabrication of cases against successful entrepreneurs. Only then will Russia shift from its current place at number 120 and join the ten runners up to lead the global economy.