A B S T R A C T

The purpose of the research is to assess the role and impact potential of venture capital and business angel mechanisms in financing small and medium-sized enterprises (SMEs) in Azerbaijan.

The methodology of the research– the study employs institutional and comparative analysis methods, as well as an examination of international experience.The current state of Azerbaijan’s financial ecosystem is analyzed, and the impact of venture capital and business angels on the innovation potential, competitiveness, and sustainable development of SMEs is evaluated.

The practical importance of the research - lies in the fact that the findings provide practical recommendations for policymakers involved in SME financing, startup ecosystem participants, and investors.

The results of the research indicate that the development of alternative financing mechanisms can significantly expand SMEs’ access to financial resources.

The originality and scientific novelty of the research - consist in the comprehensive analysis of venture capital and business angel mechanisms in the Azerbaijani context, as well as in the conceptual identification of their systemic role in SME development.

Keywords: small and medium-sized enterprises, venture capital, business angel, financing, Azerbaijan, investment.

https://doi.org/10.30546/2707-2037.052.2.2026.132