VENTURE CAPITAL AS AN ALTERNATIVE FUNDING FOR MICRO SMALL AND MEDIUM ENTERPRISES (UMKM) IN MEDAN

ABSTRACT The Doer of Micro, Small and Medium Enterprises have an important role to make and spur a state economic development. According to the Data of Ministry of Cooperation and UKM (2014), the number of cooperation and UMKM is more than 98% of the total entrepreneur in Indonesia. The number of UMKM is more than 58 million enterprises and contribute to pervade more than 97% of man power or in number is around 107 million people. This is a national asset for the sustainable economic development, but there is a funding problem as a classic problem for UMKM. Venture Capital is the most appropriate fund for UMKM as the source of financial capital. The Investment Model of Venture Capital with the participation of capital or in other funding form into a company as the business partner(Investee) in certain period of time has a good prospect, good potential of value creation, feasible, although not bankable. Modal venture investment is more appropriate to fund the UMKM and Start Up because can give fund to the company which has no standard as a company and operational history. This research is purposed to know the law regulation of UMKM empowerment through venture capital funding in Medan and how the deal between the venture capital funding institution and UMKM. The method is descriptive research which using primary and secondary data. Keywords : MSME, Funding, Venture Capital


INTRODUCTION
Micro, small and medium enterprises or called UMKM is a group of enterprises which is important for the economy of Medan. That's because UMKM is a business sector which has the biggest number with the significant role to absorb man power to increase the PDB of society. It becomes an activator of area development and economy establishment. UMKM sector has a big marketplace because there will always a marketplace for their product or services. That's because UMKM is the producer of goods and services for the middle to law class society with low purchasing capacity. The other reason is UMKM able to survive in crisis because the capital is from their own (Bagus Ardiyanto, 2013).
The important role of UMKM has motivate a lot of countries included Indonesia to develop the existence of UMKM. At least there are three reasons why UMKM is important for developing states. First because the performance of UMKM is better to create productive man power. Second, as a part from its dynamics, UMKM often reach productivity excalation through investment and technology changes. Third, because UMKM has superiority in flexibility rather than the big enterprises.  Indonesia, Jakarta, 2012, hal.17).
In Sumatera Utara there are more than 2,8 million UMKM but the registered one in Department of Cooperation and UMKM is less than 20% or about 380 thousand. There are a lot of UMKM which not being registered well. In this situation the government of Medan has commitment to develop the UMKM by empowering the UMKM. The important step to empower it is by opening the chance to increase the quality of man power.
One of the law certainty which regulate the economic activity is certainty to regulate the venture capital fund institution as one of funding institution for the UMKM, also as new funding institution outside the bank. The Venture Capital enterprises is a platform and distributor where the investor who has money want to distribute their money to the one who need it. Venture capital enterprise which run investment business to business partner is the party who can give training and mentoring in administrative, accountancy, management, JURNAL JURISPRUDENCE Vol. 9, No. 2, 2019, pp.106-125 p-ISSN: 1829e-ISSN : 2549-5615 Website: http://journals.ums.ac.id/index.php/jurisprudence/article/view/9020 108 marketing and other sector which support the activity of venture capital enterprise. In Indonesia venture capital is hoped to be able to develop in order to empower the micro, small and medium enterprises which often facing the funding obstacles. The problem is the imbalance between big entrepreneur who get support from the government with the small entrepreneur who don't get that support. Moreover time by time UMKM cannot fulfill the economic and politic requirement as the result of the rise of some banks which only being misused by the big entrepreneur and government who able to fulfill the bankable requirement, while the small entrepreneur still unable to use the existed bank institution.
The crucial problem which is faced by the UMKM is the limited access to the UMKM to the productive resources such as the capital, technology, information and marketplace. That limited access caused the obstacles to improve the capacity of the company and develop their products to have competitiveness. UMKM capital access problem caused because the limit of UMKM itself in marketing, technology mastering and information, also bad management problem. Those factors caused a low trust from the bank institution and other funding institution to give loan and capital to UMKM. Furthermore, the un-capability of UMKM to provide collateral make them unable to accessed credit from bank. If UMKM as the form of people`s economy is not given access and not being empowered, it will have no ability to compete the power of global economy.
The limited capital and permission problem make UMKM in Medan unable to develop.
Less information and entrepreneurship competition caused low business productivity and human resources. This becomes one of the obstacles of UMKM to develop in a state economic. It seen from the un-capability of UMKM seller in managing their enterprise. The lack of information which known by the UMKM entrepreneur about the Venture Capital Company as one of funding alternative. This research also become one of the suggestion for the funding institution especially the venture capital in its existence in funding business to help UMKM in Medan.
Venture Capital funding have to be preceded by an agreement. The presence of multiple form of enterprises of the business partner will effect to the pattern of legal relationship. The matter of the collateral in venture capital funding also have to be noticed in order to bring the UMKM empowerment. Regulations about the existence of venture capital with its connection to the UMKM empowerment is also not really good yet.
Based the explanation above the existence and role of the funding institution venture capital in Indonesia is important to be examined. It because that's a new rise institution which has impact to the business world development and the legal world. Unfortunately this institution is not followed with the legal regulation which regulate the operational and legal relation between the venture capital company with the funded company.

RESEARCH METHOD
This legal research has normative empiric typology research. The normative empiric legal research (applied) examines the implementation of positive law in the factual legal phenomenon. The study is purposed to make sure whether the implementation of positive law in concreto is suitable with the act substance. This normative empiric legal research is divided into 2 stages. The first stage is to examine the regulations and see its implementation. The second stage is to see how the implementation of the regulation in the real life.
This research is taking place in Medan, Sumatera Utara which is considered of 21 subregion and has large number of MSME. The research is done by doing deep and direct interview and collect the data from PT. Sarana Sumut Ventura.

A. LEGAL REGULATION ANALYSIS TO THE ESTABLISHMENT OF UMKM THROUGH THE ALTERNATIVE EMPOWERMENT VENTURE CAPITAL IN MEDAN
A. Based on these data UMKM activities in the city of Medan must be accommodated as best as possible because many residents depend on these activities. The existence of UMKM has been proven to have influenced the community's economy, therefore the existence of UMKM must be empowered by the government. In practice, UMKM actors, especially micro and small businesses, often have difficulty accessing capital because these businesses have not yet been assessed as bankable to get capital loans.
Empowerment of UMKM through venture capital financing alternatives is based on the opening of the 1945 Constitution that one of the goals of an independent Indonesian nation is to advance public welfare, meaning that it is not only for a part of the community so that the government is fully responsible for working on a system that fulfills this goal. This is also included again in the articles in the 1945 Constitution, articles 33 and 34 where the state develops a social security system for all people and empowers weak and Through this Act the government is expected to take steps that are solution and applicable in empowering community businesses. Mahidin said that empowerment can be interpreted as an effort to improve the ability of a person or group so that they are able to carry out their duties and authorities as the task demands performance. Empowerment is a process that can be done through various efforts, such as giving authority, increasing participation, giving trust so that each person or group can understand what will be done, which in turn will have implications for increasing the achievement of goals effectively and efficiently. The concept of empowerment carried out aims in the economic and social fields empowerment, with the intention of the target group can manage its business, then market and form a marketing cycle which is relatively stable and so that the target group can carry out its social functions in accordance with its social roles and tasks. Community empowerment is a basic element that enables a community survive and in a dynamic sense develop themselves and achieve progress. Community empowerment itself becomes the source of what in political insight is called national resilience. This means that if people have high economic capacity, then it is part of national economic resilience (Rukminto, 2008 Institutions, is a business entity that carries out financing activities in the form of providing funds or capital goods without withdrawing funds directly from the public.

Concept Of Partnership In A Cooperation Agreement Between A Venture Capital
Enterprise And UMKM Players.The concept of partnership is a translation of togetherness (partnership) or social responsibility for the environment in accordance with the concept of participatory management. Because under the participatory concept, large companies must also be responsible for developing small businesses and their customer communities because in the end the partnership concept that guarantees the existence of large companies, especially for the long-term. Partnership is a business strategy that is carried out by two or more parties in a certain time to do mutual benefits by mutual need JURNAL JURISPRUDENCE Vol. 9, No. 2, 2019, pp.106-125 p-ISSN: 1829e-ISSN : 2549-5615 Website: http://journals.ums.ac.id/index.php/jurisprudence/article/view/9020 118 and mutual encouragement. Because it is a business strategy, the success of a partnership is largely determined by the compliance between those who partner in carrying out business ethics. In an effort to realize a business partnership that is able to empower the people's economy, it is very necessary to have a clear role for each party involved in the partnership. Thus, it is expected to measure the extent to which the parties concerned have   Vol. 9, No. 2, 2019, pp.106-125 p-ISSN: 1829e-ISSN : 2549-5615 Website: http://journals.ums.ac.id/index.php/jurisprudence/article/view/9020 120 a maximum limit of 20 million rupiah per group. The financing scheme is considered good enough to help small communities but the funding is difficult to access by people who live far away in the city of Medan because PT. Sarana Sumut Ventura Medan only domiciled in the City of Medan.

C. UNSURE OF AGREEMENT IN PATTERN OF PARTNERSHIP BETWEEN VENTURE CAPITAL COMPANY AND THE UMKM PLAYERS
Based on article 1313 Private Law Book, an agreement is an act with one or more person tied to one or more other people. From this phenomenon appear one relationship between those two individuals or more which called an engagement. An agreement issue an engagement between two individuals who made it. In its form, agreement is a series of words containing promises or abilities that are spoken or written. Thus, the relationship between an agreement and agreement, is that the agreement issued an agreement.
Agreement, is the source of the agreement (J. Satrio, 1995) As mentioned in the old doctrine, which referred to as an agreement, is a legal act based on an agreement to cause legal consequences. In this definition we can see there is a consesualism principle and the emergence of legal consequences (growth or disappearance of rights and obligations), then according to the new doctrine put forward by Van Dunne in his book Salim H. S., an agreement is defined as a legal relationship between or more parties based on the agreement to cause legal consequences. From the above understanding, it seems that in an agreement that will lead to a legal relationship of the parties who made the agreement.
Each party is bound to one another and creates rights and obligations between the parties who made the agreement. If an agreement is observed and elaborated further, then in an agreement there are elements which can be classified as follows: a. There is the party who make the agreement The intended party is that there must be at least two people, the parties acting as the subject of the agreement. The subject can consist of humans or legal entities. In the case of venture capital partners that are parties to the financing agreement are the Venture Capital Company (PMV) / Sharia Venture Capital Company (PMVS) and the business partner company in this case micro, small and medium business actors.
b. There is the agreement from every party The parties before making an agreement or in making an agreement must be given both, this can be called the principle of consensual of an agreement. Consensus must exist without coercion, deception, and doubt. In this case the Venture Capital Company (PMV) and the business competition company agree on their respective rights and obligations without any element of coercion either directly or indirectly, deception or doubt.
c. There is a purposed to be achieved An agreement must have one or some goals which it want to achieve and with that agreement those purposes or with the presence of the agreement the purposes can be achieved. In this case they as the subject of the agreement which make them as the goal of the run of venture capital investment accordance to article 9 paragraph 2 In every financing business activity, including venture capital, the initiative to enter into contractual relations comes from parties, especially the investee company.
Thus, the will of the parties who are the source of the law, wishes of the parties are set forth in written form in the form of an agreement stipulating the rights and obligations of each party in the venture capital financing business and only applies as long as the parties do not specify otherwise specifically in the agreement made.

CONCLUSION
Philosophically, the protection of UMKM empowerment is protected by a constitution which is one of the goals of the Indonesian state in opening the 1945 Constitution of the of the agreement such as the parties agreeing, the agreement between the parties without coercion, deception or doubt, the existence the goals to be achieved from the agreement, the achievements to be carried out by each party, the existence of certain conditions and the shape of the agreement.