Venture and Startup Industry "Welcomes Multiple Voting Rights Approval at Cabinet Meeting"

[Asia Economy Reporter Kim Cheol-hyun] The venture and startup industry welcomed the approval of the amendment to the Venture Business Act for the introduction of multiple voting rights for unlisted venture companies at the Cabinet meeting on the 22nd.

The Korea Venture Business Association issued a statement on the day, saying, "We, representing all venture companies, welcome the approval of the amendment to the Venture Business Act for the introduction of multiple voting rights shares for unlisted venture companies at the Cabinet meeting," and evaluated that "once the introduction of multiple voting rights for unlisted venture companies is implemented, founders will be able to exercise entrepreneurship from a long-term perspective based on stable management rights, providing an opportunity for venture companies to receive large-scale investments and grow into unicorn companies."

The association added, "To overcome the economic crisis caused by COVID-19, we must actively foster venture startups based on innovation and achieve a rapid digital economic transition," and "we hope that this multiple voting rights introduction plan will be promptly passed through the legislative process in the National Assembly and that the preparation of subordinate laws and regulations for its implementation will proceed smoothly."

The startup industry, including the Korea Startup Forum (hereinafter Kospo), also expressed their welcome. Kospo said, "With the announcement of the Cabinet’s approval of multiple voting rights, we have taken one step closer to the 'introduction of multiple voting rights for unlisted venture companies' that Kospo has continuously promoted to revitalize the startup ecosystem," and "we expect that large-scale private investments in startups through multiple voting rights will increase domestically, contributing to the scale-up and exit activation of many companies."

Kospo pointed out some concerns despite limiting the maximum duration of multiple voting rights to within 10 years, such as restricting the grace period to a maximum of 3 years when converting to common shares after listing. "We hope that in-depth discussions on this will be conducted in the National Assembly in the future and that adjustments will be made in a way that can revitalize the startup ecosystem," they stated.

Kospo said, "Multiple voting rights will serve as a safeguard that allows founders to continue innovation based on entrepreneurship while actively attracting large-scale investments," and "we expect the government and the National Assembly to actively support innovative startups so that they can grow as key players in the digital economy through large-scale investment attraction."

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