Venture Verification System Reform: "Innovation and Growth Evaluation Led by Private Experts"

[Asia Economy Reporter Kim Bo-kyung] A new venture certification system, led by private experts rather than the public sector, which evaluates innovation and growth potential, will be implemented starting from the 12th.

On the 10th, the Ministry of SMEs and Startups announced detailed information on the operation method, application procedures, and evaluation indicators ahead of the full-scale implementation of the "private-led venture certification system."

The existing venture certification system was centered on public institutions, contributing to the quantitative growth of venture companies and the activation of the venture ecosystem. However, there have been criticisms that it has limitations in selecting truly innovative venture companies. As of December last year, 85% of the venture certification requirements were based on guarantees and loans, while research and development and venture investment types accounted for only 7.3% each.

To introduce the "private-led venture certification system," which is based on private expert-led operation and evaluation focused on innovation and growth potential, the Ministry of SMEs and Startups amended the Special Measures for the Promotion of Venture Businesses Act in February last year.

Over the past year, preparations have been made for the new system's implementation, including designating venture certification institutions, selecting professional evaluation agencies, and establishing a venture certification system.

First, the institutions responsible for certifying venture companies have been transferred from public institutions to private institutions, and the system will be operated by private experts. Previously, venture certification was conducted by three public institutions: the Korea Technology Finance Corporation, the Small and Medium Business Corporation, and the Korea Venture Capital Association.

Under the revised system, the Venture Certification Committee, composed of private experts such as entrepreneurs, investment reviewers, and academics/researchers (Chairman: Jung Joon, CEO of Sollid), will be responsible for certification tasks.

To ensure efficient operation of venture certification tasks, the Ministry designated the Korea Venture Business Association as the venture certification institution through a public contest in June last year. The designation period for the venture certification institution is three years.

New evaluation indicators will also be introduced. The existing venture certification system based on guarantees and loans will be abolished, and a new "innovation growth type" will be established. Accordingly, new evaluation indicators focusing on technological innovation and business growth will be introduced.

Both the "foundation" and "activities" necessary to achieve results, as well as the outcomes themselves, will be reflected in the evaluation from the perspectives of technological innovation and business growth.

The detailed evaluation consists of a total of 14 indicators, including whether the technology is new (product), technology maturity, entrepreneurship, and efforts toward sustainable management.

There are four evaluation types based on industry (manufacturing/service) and business age (less than 3 years/more than 3 years), and applying companies can select the type that suits them.

Small and medium enterprises wishing to obtain venture certification can access and apply through the Venture Certification Integrated Management System starting from the 12th, and the venture certification institution will begin full operations from the 15th. Until the 11th, before the new system is implemented, applications can be submitted through the existing Venture In System.

Once the application is completed, a professional evaluation agency will be assigned based on the company's industry and region, and the agency will conduct document reviews and on-site investigations.

Subsequently, based on the evaluation results from the professional evaluation agency, the Venture Certification Committee will make the final deliberation and resolution on whether to certify the company as a venture business.

The validity period of venture certification will be extended from the current 2 years to 3 years. By linking government and private IT systems, some documents such as financial and employment information can be submitted with one click, enhancing convenience for companies.

Lee Ok-hyung, head of the Venture Innovation Policy Division at the Ministry of SMEs and Startups, said, "As evaluation data accumulates in the future, we plan to further refine the evaluation indicators by flexibly reflecting changing technology trends and detailed industry characteristics. We hope this reform will expand opportunities to certify venture companies with growth potential."

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