Fund Formation Drops 78%... Ministry of SMEs and Financial Services Commission Launch 'CPR' for Venture Market

Venture Fund Formation Drops Over 78% in Q1
Funding Support and Regulatory Innovation Plans to Be Announced This Week
'Venture Capital Forum' Held on 18th to Diagnose Market

Minister Lee Young, Ministry of SMEs and Startups [Photo by Yonhap News]

The Ministry of SMEs and Startups and the Financial Services Commission have joined forces to revive the shrinking venture investment market. The two ministries plan to announce measures this week to improve funding conditions and enhance the competitiveness of venture and startup companies through financial support and regulatory innovation.

On the 18th, the Ministry of SMEs and Startups and the Korea Venture Capital Association held a 'Venture Capital Forum' at the Glad Hotel in Yeouido, Seoul, to diagnose and analyze the venture investment market situation and discuss countermeasures.

This event was organized for the industry and government to jointly respond to the crisis amid the ongoing uncertainty in the global financial environment, which has been causing the venture investment market to contract.

In South Korea, venture fund formation and investment performance in the first quarter of this year decreased by 78.6% and 60.3%, respectively, compared to the same period last year.

Minister Lee Young of the Ministry of SMEs and Startups stated that they will concentrate all efforts to support overcoming the complex crisis faced by the venture industry and to revitalize the venture and startup ecosystem.

He specifically mentioned that, together with the Financial Services Commission, they will prepare separate measures to enhance the competitiveness of companies through financial support and regulatory innovation for venture and startup companies, which will be announced this week.

The Korea Fund of Funds plans to invest about 1 trillion won this year to induce the formation of more than 2 trillion won in sub-funds. Additionally, it will strengthen research and development in the deep tech sector and actively support the growth and global expansion of venture and startup companies in advanced fields, including the introduction of global innovation zones.

At the forum, Yoon Geon-su, chairman of the Korea Venture Capital Association, delivered a keynote speech titled 'Response Strategies and Policy Support Directions for Revitalizing the Venture Ecosystem.'

He emphasized that the government should support companies with high growth potential in new growth industries and that global expansion, deep tech technology development support, and regulatory innovation are necessary to overcome the crisis in the venture and startup ecosystem. He also mentioned the need to activate early-stage investment and increase the Korea Fund of Funds for small venture capital firms.

During the panel discussion following the keynote speech, various suggestions were made to revitalize the exit market, such as expanding secondary funds and easing IPO (Initial Public Offering) requirements, as well as improving systems to activate CVCs (Corporate Venture Capitals).

Minister Lee said, "The government will carefully review the diverse opinions from the industry presented at the forum and reflect them in venture and startup-related policies as it moves forward."

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