"Venture Investment Promotion Act, New Horizon for Venture Capital Industry Development"

[Asia Economy Reporter Kim Cheol-hyun] The Korea Venture Capital Association (hereinafter referred to as the Association, President Jeong Seong-in) announced on the 12th that it welcomes the enforcement of the "Act on the Promotion of Venture Investment" (hereinafter referred to as the Venture Investment Promotion Act), newly introduced to the venture investment industry from the 12th.

In a statement on the 11th, the Association said, "After the enforcement of this law, unlike before, companies in all industries except for gambling industries can receive venture investments, and the systems for startup planners (accelerators) and professional angels have been specified, so it is expected that investments in early startups will increase."

In particular, the Association evaluated that the venture investment partnership (fund), a core means of venture investment, has been systematically organized under a single law, making it easier for fund managers such as venture capitalists to execute their duties. Additionally, the mandatory investment ratio for startup venture companies, which was applied to each fund, has become more flexible based on total assets under management, which is expected to be felt in the investment field.

According to the Association, matters related to venture investment have been subsidiarily dealt with in the "Small and Medium Enterprise Startup Support Act" enacted in 1986 and the "Special Measures for the Promotion of Venture Businesses" enacted in 1997. Starting this year, with the enforcement of a unique law solely for venture investment, an institutional infrastructure that realistically reflects the venture startup ecosystem has been established in the venture investment field. The Association stated, "This means that venture capital has moved beyond functioning as a means of supporting companies to establishing a new horizon for development as an independent financial industry."

The Association added, "The venture investment market, which had been growing by setting new records every year in recent years, temporarily slowed down in the first half of this year due to the unavoidable external factor of COVID-19. However, based on this opportunity of the law enforcement and the second venture boom such as the startup fever, it is expected to clearly fulfill its role as a driving force to foster future new industries and invest in K-unicorns to innovate the economy."

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