Introduction. At the Russian economy’s transition to innovative development, the question of its investment mechanism is very important. Venture investment is most promising in this case. For Russia, venture investment is a rather new tool and, therefore, market mechanisms are introduced with great difficulties. Tasks and methods. To observe the current situation and the causes thereof; to detect the existence of a link between innovative development and the usage of the venture investment mechanism. Theoretical methods (analysis, synthesis, modeling, logical and system approaches, deduction, and induction) and empirical methods (observation, measurement, and comparison) were used. Results: the causes of the slow introduction of venture investment into the Russian economy were recognized; an idea of strengthening the links between innovative development and market investment mechanisms was developed. In particular, a conclusion was made that using venture investment would allow implementing developer projects as well as innovative ones. Such investments would allow companies to develop much quicker. It has impact on the regional and national development, on the increase of well-being, and on the unemployment rate decrease. Conclusion. Thus, the use of venture funds would allow turning to the innovative model of development, but the state support is necessary at the early stages of venture financing. For increasing the Russian economy’s competitiveness at this stage, it is recommended to address venture investments to a limited number of critical technologies.