[Tried It! Angel Investment] Severe Concentration in Seoul... To Prevent 'Jibangsomyeol'

Angel Club 70% Concentrated in 수도권
Local Governments Create Funds to Boost 'Startup Boom'
Private Networking... Promoting Investment and Collaboration

Editor's NoteChristopher Columbus, who discovered the New World, had Queen Isabel behind him, and the genius artist Leonardo da Vinci was supported by the Medici family. Spain's greatest architect Gaudi was able to freely create his works because of Guell, who supported him throughout his life. These individuals were patrons who quietly supported challenges that might have seemed reckless, akin to today's 'angel investors.' This article contains a reporter's vivid experience of meeting angel investors who invest in early startups and participating in mock investments.

As of December last year, the number of domestic angels registered with the Angel Investment Support Center reached 30,000. This statistic represents the number of individuals who applied for income tax deductions after investing in startups. If an individual invests in startups or venture companies and holds the investment for more than three years, they can receive income tax deductions ranging from 30% to 100%, depending on the amount. Since higher income earners receive greater tax benefits, high-income professionals show strong interest in angel investing.

However, the concentration of angels in the metropolitan area is severe. About 12,600 angels, accounting for 43% of the total, are concentrated in Seoul. Adding approximately 6,800 in Gyeonggi Province (23%) and about 1,000 in Incheon (3.5%), seven out of ten angels are located in the metropolitan area. The situation is similar for professional angels, who must meet certain qualifications. There are 256 professional angels registered with the Ministry of SMEs and Startups, with about 90% concentrated in Seoul and the metropolitan area including Gyeonggi and Incheon. There were no professional angels in Ulsan, Daegu, Gyeongbuk, or Sejong. Gangwon, Jeonbuk, and Chungbuk each had only one. Among the 257 'angel clubs,' which serve as social groups for angels, 70% are located in the metropolitan area.

Angel investment plays a vital role as a catalyst for the growth of early startups. For youth entrepreneurship to thrive and for the number of venture companies to increase, angels must provide support. Especially for professional angels, companies that receive investments of 50 million KRW or more can obtain venture company certification, making them significant contributors. However, the shortage of angels in regional areas is a major concern for local government officials. Park Sun-hee, head of the Economic Enterprise Division at Chungbuk Provincial Government, said, "Even the startups that remain tend not to take root locally and choose to relocate their headquarters to Seoul to secure follow-up investments and personnel."

For a green forest to flourish, seedlings must grow. Soil without plants inevitably becomes barren. If startups, which are like seedlings, decrease, it can lead to a sequence of job losses → economic contraction → regional extinction. For this reason, local governments have recently been focusing on creating funds to spark a 'startup boom.' Chungbuk Province has set a goal to raise 100 billion KRW under the name 'Startup Fund,' and Suwon City in Gyeonggi Province aims to raise the same amount with the 'Saebit Fund.' Daegu City has launched a venture fund to foster the ABB (AI, Big Data, Blockchain) industry, and Gyeongbuk Province has started creating a regional New Deal venture fund.

So, how should one invest in startups? To become an angel, an individual can invest directly in companies or form a personal investment association to invest collectively. Personal investment associations must be formed privately with fewer than 49 investors, not through public offerings. Therefore, using social networking services (SNS) to form personal investment associations or promoting companies to an unspecified number of people to induce investment is prohibited. A few years ago, there was a case where promotional materials were posted in apartment complexes in Gangnam and Mokdong, guaranteeing principal and profits, and business briefings were held, which was exposed as illegal.

Since companies cannot be introduced to many people, building networks becomes even more important. In Chungbuk, where the 37th professional angel training course was held, private groups such as the The Dream Venture Forum and Chungbuk Startup Nomad Forum have been formed to revitalize the startup ecosystem, allowing senior and junior entrepreneurs, investors, government agencies, and academia to meet regularly and communicate. Jin Byung-ki, chairman of The Dream Venture Forum, said, "We formed the forum last August to share diverse information among local businesspeople and to promote collaboration and investment," adding, "We are investing in promising small and medium enterprises by forming more than one personal investment association every month."

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