South Korea’s Ministry of SMEs and Startups (MSS) announced that it is considering the launch of a ₩1 trillion ($749 million) fund of funds this year to boost the country’s innovative venture industry.
A statement released by the ministry said Minister Lee Young aims to leverage the capabilities of the MSS to support the innovative venture industry in overcoming the current crisis and revitalizing the startup ecosystem.
Aside from launching the fund of funds, the ministry also offers full-scale incentives, such as management and performance fees, to encourage venture capital firms to promptly execute an investment surplus of around ₩11 trillion.
Additionally, the MSS will help ventures enter the global market by introducing regulatory innovations such as global innovation special zones and improving relevant laws and systems.
To further support Korean startups advancing abroad and attract foreign talent, the MSS is developing policies under the watchword “Startup Korea.” The government is also preparing a plan to improve the financing environment for ventures and startups, with a plan to be announced soon in collaboration with the Financial Services Commission.
YOON Gun-soo, the Chairman of Korea Venture Capital Association, said that the current contraction of the investment market has been caused by economic uncertainty rather than lack of investment resources and it is a global phenomenon.
He said government needs to actively support companies with high growth potential, such as companies in new growth industries, and overcoming the crisis in the venture/startup ecosystem requires facilitating the entry of ventures and startups to the global market, providing support for deep technology development and regulatory innovation.
He also said that it is necessary to boost early-stage investment and increase the fund of funds for small venture capital firms.
Minister LEE agreed with most of the suggestions from the industry and said, “As this crisis is a global phenomenon and overcoming the crisis in a short time period is the key to enhancing economic competitiveness, the government and the private sector need to take this as an opportunity to strengthen the venture/startup ecosystem and collaborate in making an all-out effort to invigorate the ecosystem.”