Investment of 100 Billion KRW in Over 1,500 Startups... "COVID-19 Simplifies Selection Process"

Data provided by the Ministry of SMEs and Startups

[Asia Economy Reporter Kim Daeseop] The Ministry of SMEs and Startups announced on the 24th that it will conduct linked investments worth 100 billion KRW in collaboration with Korea Venture Investment Corporation for over 1,500 promising startups.

This investment is designed to supply liquidity to early-stage startups (within 3 years of establishment) in the private venture investment market, which has been contracted due to the impact of COVID-19, enabling them to grow to the next level through direct investment by Korea Venture Investment Corporation.

The investment targets are companies participating in the Ministry’s representative startup programs (Pre-Startup Package, Successful Early Startup Package, Youth Startup Academy graduates) that have been recognized for business performance and growth potential, have no prior investment records, and are within 3 years of establishment. The investment amount will be the same scale as the startup support funds previously received.

Considering the COVID-19 crisis, the Ministry and Korea Venture Investment Corporation plan to simplify the selection process by streamlining the essential corporate valuation process to enable rapid investment, aiming to execute the investment by early July this year, within one month of application submission.

The first application period is from the 26th of this month to the 3rd of next month. Companies can apply online through the Angel Investment Support Center website with a recommendation from the startup support program’s managing institution, submitting investment application forms and business plans.

Companies wishing to receive investment can select a corporate valuation of 500 million KRW, 1 billion KRW, or 1.5 billion KRW when applying. Korea Venture Investment Corporation will review and finalize the investment decision and appropriate corporate valuation at its selection meeting. Up to 100 million KRW will be invested, acquiring new common shares within a 10% equity stake post-investment.

Additionally, to prevent undervaluation during the corporate valuation process, investee company executives and employees will be granted the opportunity to exercise a call option (the right to purchase shares invested by Korea Venture Investment Corporation) up to 50% within 1 to 3 years from the investment date, enabling them to secure management control.

Jeon Sehee, Director of Investment Recovery Management at the Ministry, said, "We hope this investment will greatly help over 1,500 startups overcome the crisis and serve as a stepping stone for their leap forward. We will focus investments on startups and venture companies in the non-face-to-face sector, which have created about 20,000 jobs over the past three years through venture investments, to proactively respond to the post-COVID era."

This content was produced with the assistance of AI translation services.