Kibo, 'Establishment of VC Venture Fund Special Guarantee'... "Spreading the Second Venture Boom"

Special Guarantee Support up to 5 Billion KRW Limit for Target VCs
Preferential Measures Applied Including 100% Increase in Guarantee Ratio

The headquarters of the Korea Technology Finance Corporation located in Nam-gu, Busan.
[Photo by Korea Technology Finance Corporation]

[Asia Economy Reporter Junhyung Lee] The Korea Technology Finance Corporation (Kibo) announced that it will establish a 'VC Venture Fund Special Guarantee' and recruit venture capital (VC) firms eligible for special guarantees from the 5th of this month until July 2nd.

The VC Venture Fund Special Guarantee is a follow-up measure of a complex financial support plan prepared by the government to spread the second venture boom and realize the goal of becoming one of the four major venture countries. It is considered one of the core projects of the 'Technology-based Venture and Startup Complex Financial Support Plan' promoted by the Ministry of SMEs and Startups.

Kibo will provide guarantees up to a limit of 5 billion KRW to VCs selected as targets for the VC Venture Fund Special Guarantee. Kibo selects target VCs by reviewing investment status, investment capability, and contribution to the activation of the venture investment market among small and medium enterprise startup investment companies (Changtusa) and limited liability company (LLC)-type VCs selected as operators of the Korea Fund of Funds investment project. VCs receiving the special guarantee will pay the entire loan secured by the Kibo guarantee certificate as venture fund contributions and invest it in venture companies.

Support structure of the Korea Technology Finance Corporation's 'VC Venture Fund Special Guarantee'.
[Photo by Korea Technology Finance Corporation]

To facilitate smooth fundraising for VCs, Kibo applies preferential measures such as ▲raising the guarantee ratio from the existing 85% to 100% ▲applying a fixed guarantee fee rate of 1%, which is 0.2 percentage points lower than the average guarantee fee rate of 1.2% ▲providing guarantee support up to 80% of the planned operator contribution amount within 3 billion KRW per fund.

Jung Yun-mo, Chairman of Kibo, said, "Kibo has experience operating special guarantees for Changtusa and Changtusa CLO guarantees to support the expansion of investment resources for Changtusa during the first venture boom." He added, "Based on this, we will actively support the VC Venture Fund Special Guarantee to help excellent technology innovation companies receive more investment and guarantee support."

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