Korea's venture ecosystem depends too much on the government and lacks investment diversity, panelists asserted at a venture ecosystem seminar held on Dec. 11.
In particular, they advised the government to lay the foundation that would help venture companies improve management efficiency.
The seminar was organized by the Korean Association of Small Business Studies in cooperation with lawmakers Lee Dong-soo and Kim Jae-won at the National Assembly Hall in Yeouido, Seoul. It was designed to address problems of the Korean venture ecosystem as a whole.
“There is a lot of policy funding for Korean ventures and the Korean government’s venture support facilities are better than those in Silicon Valley,” said Yoo Byung-jun, a professor at Seoul National University. “A U.S. angel investor once told me, ‘If I were to be born again, I will do business in Korea.’"
But the problem is that the Korean venture ecosystem depends too much on policy financing, Yoo said. "The government monitors even the profitability of the Fund of Funds and the Growth Ladder Fund. Due to the government’s tight monitoring, venture capitalists have no choice but to invest in safe investment targets only."
In particular, Yoo pointed out that the government's support concentrates on specific stages, creating investment holes in the early and scale-up stages. "These holes make it difficult for startups to grow into unicorns," Yoo added.
Bae Jong-hoon, a professor at Seoul National University, argued that the Korean venture ecosystem pivots around venture capital firms and the companies that receive investment from them. He pointed out that investment aimed at improving the efficiency of corporate management rather than direct policy funding will fundamentally benefit the Korean economy as well as the Korean venture ecosystem in the long run.