Now investors in Russia are flocking to Web 2.0 companies that serve local markets, more like to what's going on in China.
"A Russian company can expect to serve the domestic market," said Ammonsov.
The country is also working to make it easier to do business there. The Duma passed laws, which will take effect next year, that have reformed several parts of Russia's intellectual property code. It is also working on laws, similar to regulations from the Securities and Exchange Commission, which will create more transparency in accounting.
Additionally, the RVC has set up its program in a way, conceivably, to put some distance between the government and the RVC and between the RVC and the venture capital firms. The RVC's board consists of three government directors and three independent directors, two of which are foreigners (Israel's Erlich and Esko Aho from Finland).
The RVC, meanwhile, will not participate in the day-to-day management of the Russian-based funds. The RVC will put up 49 percent of the money in the fund. The U.S. (or European) venture fund will put up 51 percent. Approximately 80 percent of the money will get invested in early stage companies. The foreign venture investors, however, get to decide which companies to put the money into.
Are the safeguards, combined with the ability to use millions of dollars of someone else's money for practically nothing, enough to attract VCs? It's still probably a tough sell. The first three partners are clearly the most amenable. Tim Draper of DFJ and Pitch Johnson, who founded Asset Management, have spoken for years about Russia's potential. DFJ is also more focused on foreign investments than most U.S. firms.
Tamir Fishman, meanwhile, comes out of Israel, which has an established relationship with Russia's tech community. Israel's incubator program, which helped the country become a tech powerhouse, was created as a way to employ Russian émigrés in the 1980s.
Other investors were less enthusiastic.
"I am guessing that someone with Russian roots will take them up on it," wrote one VC. "Or some fledgling new VC that could use a jump start."
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