Shinbo, First Policy Financial Institution to Sign 'Conditional Equity Purchase Agreement'... Also Investing in Mobile Game Companies

[Asia Economy Reporter Song Seung-seop] The Korea Credit Guarantee Fund is set to invest in a mobile game developer using the SAFE (Simple Agreement for Future Equity) method, becoming the first policy financial institution to do so. The target company is 'ACity Games.'

SAFE is a method where investors first invest in early-stage companies whose valuation is difficult to determine, and when follow-up investments are secured from venture capitalists or others, the investor's equity is determined based on the agreed company valuation. This method is mainly used in Silicon Valley, USA, and was implemented domestically after the introduction of the 'Act on Promotion of Venture Investment' in August last year.

This method can prevent excessive dilution of founders' equity during early-stage fundraising. Investors can invest quickly without the burden of estimating an appropriate valuation.

Accordingly, the Korea Credit Guarantee Fund introduced the SAFE investment method as the first domestic policy financial institution, as it enables investment in promising growth companies even without prior investment performance. To protect investors' rights and prevent moral hazard by investee companies, a separate investment contract has been prepared, laying the foundation for activation.

A representative from the Korea Credit Guarantee Fund stated, "With the introduction of investment products using the SAFE method, we can quickly invest in high-growth startups," and emphasized, "We will focus on discovering promising companies that the private sector has not invested in and serve as a catalyst in the venture investment market."

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