Formation of Accelerator No.1 Venture Investment Fund

First Case of Accelerator-Formed Venture Investment Fund Registration Since Enforcement of the Venture Investment Act

[Asia Economy Reporter Kim Cheol-hyun] The Ministry of SMEs and Startups (Minister Park Young-sun, hereinafter referred to as the Ministry) announced on the 7th that Pohang University of Science and Technology Technology Holdings (hereinafter POSTECH Holdings), an accelerator, has registered the 'IMP No. 1 Fund' worth 5.1 billion KRW as the first venture investment association established by an accelerator.

This is the first case since the enforcement of the 'Venture Investment Act' on August 12, which allowed accelerators to register venture investment associations to expand the private-sector-led early investment ecosystem. Under the existing Small and Medium Enterprise Startup Support Act, accelerators could only invest through capital and the formation of personal investment associations, but the Venture Investment Act removed the boundary by allowing accelerators to also form venture investment associations, which were previously only permitted for venture capital companies.

When accelerators form venture investment associations instead of personal investment associations, there is no restriction on corporate investment, making it easier to attract corporate investors. Additionally, the autonomy is expanded by relaxing obligations for early startup investments and investment ratios in listed companies, allowing for the composition of diverse venture investment portfolios.

POSTECH Holdings, which applied to register this venture investment association, has invested approximately 9.2 billion KRW in 37 companies over three years since being approved as an accelerator by the Ministry at the end of January 2017, and currently operates four incubation programs. POSCO, the first investor in the accelerator’s No. 1 venture investment association, opened 'Change-up Ground,' a public-private partnership tip town, in July this year in cooperation with the Ministry, establishing a startup incubation infrastructure led by the private sector for the first time in Korea.

Yoo Ju-hyun, CEO of POSTECH Holdings, said, "It was difficult to attract large-scale corporate investments through personal investment associations, but with the enactment of the Venture Investment Act, accelerators can now form large-scale associations." He added, "The association’s investment funds will be concentrated on early startups discovered through the POSCO IMP program, and as both an accelerator and fund manager, we will do our best to discover and nurture promising startups."

Jeon Se-hee, Director of the Investment Recovery Management Division at the Ministry, said, "Starting with the accelerator’s No. 1 venture investment association, we hope that venture investment associations formed by accelerators will actively attract private capital and revitalize the early investment ecosystem."

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