The Hungarian state since the change of system has seen raising supply as the way to help innovative firms find venture capital. Hitherto it has used a method increasingly exceptional (and obsolete) internationally: having investment firms and venture-capital funds in its exclusive ownership invest capital in firms selected by the state apparatus. But such state-owned investors tended to prefer traditional undertakings and had little effect on the development of innovative technology firms. The negative experiences and high costs of government capital injections have largely convinced governments abroad that using professional, exclusively profit-oriented investors is far more efficient than for the state itself to try to act as an experienced investor in new firms. While retaining its old investment policy, the Hungarian state began experimenting in 2007 under the Jeremie Programme with co-financing venture capital funds to ensure the venture capital market selects small and medium-sized firms preferred by the state. If the programme succeeds, the state's indirect financing method may allow the market to operate more efficiently, by offering capital under market conditions while ensuring the programme is self-financing.
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