"Multiple Voting Rights Shares for Innovative Growth, an Essential System for Venture Companies"

Venture Industry Issues Statement Urging Introduction of Multiple Voting Rights

[Asia Economy Reporter Kim Cheol-hyun] The venture industry has called for the introduction of multiple voting right shares, stating that it is an essential system for venture companies to achieve innovative growth. On the 10th, the Korea Venture Business Association, Korea Startup Forum, Korea Venture Capital Association, and Korea Women Venture Association jointly issued a statement saying, "the amendment to the Venture Business Act allowing unlisted venture company founders to issue multiple voting right shares is currently pending in the National Assembly despite the hopes of the innovative venture and startup sectors," they said.

The industry pointed out that the reason multiple voting right shares have not been introduced is due to "opposition from some civic groups and concerns about a future that has not yet occurred," and argued that "the bills currently submitted to the National Assembly include safeguards addressing these concerns." They explained that "there are sufficient safety measures to prevent side effects such as blocking the abuse of management succession by conglomerates through loopholes, issuance through strict shareholder consent, and restrictions on exercising multiple voting rights to protect minority shareholders and creditors."

In the statement, the industry said, "88% of venture companies hope to introduce multiple voting right shares, and 66% of venture capitalists support it," adding, "venture companies with strong entrepreneurial spirit need a system and foundation that allow them to actively attract investment and pursue growth strategies, which is why the venture capital industry also supports the introduction of the multiple voting right system."

Additionally, the statement included that 56% of venture companies actually worry about equity dilution when investment occurs, and as a result, 43% have experienced reduced investment scale, 7% have given up on attracting investment, and 39% have no way to respond. The industry's position is that 90% of venture companies and 77% of venture capitalists say multiple voting right shares help promote investment.

The statement emphasized, "Most advanced countries with developed innovative venture ecosystems and many unicorn companies, such as the United States, the United Kingdom, France, and Japan, allow multiple voting right shares," and warned, "In the mega trends of the 4th Industrial Revolution and digital transformation, domestic policies must not fall behind innovation and cause us to be left behind in global competition."

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