South Korea: government and venture funds move towards FinTech
GROOVEMAESTRO: The Korean Government has announced “Plans for Boosting Investments” at the 8th Meeting Promoting Trade and Investment chaired by the President Park on July 9th. The plans are developed to encourage investments in sectors such as tourism, venture, and construction where growths can be accelerated.
The presentation can be summarized into six categories and one of it is the ‘Promotion of Venture Entrepreneurship’.
It includes the government’s plan to promote tech entrepreneurship and attract talents to this sector. The government also plans to support M&A and venture investments from the private sector.
The presentation can be summarized into six categories and one of it is the ‘Promotion of Venture Entrepreneurship’.
It includes the government’s plan to promote tech entrepreneurship and attract talents to this sector. The government also plans to support M&A and venture investments from the private sector.
1) Reinforcement of Creative Economy Innovation Center
*The Innovation Center will provide a one-stop information, find and actualize ideas for entrepreneurs, and provide export channels for businesses to expand abroad.
* Events will be held at Innovation Center.
2) Boost Venture Market
* Attract talents by giving tax benefits on stock option.
* Provide office spaces, outlets for public supply, management support, and export channels for entrepreneurs. Launch “Born Global Entrepreneurship Program” for venture companies that target global markets.
3) Boost M&A Market in Korea
* Easing the anti-monopoly regulation on conglomerates so that they can acquire more SMEs.
* Tax benefits for investors when their tech based innovative companies are acquired, as well as allowing for M&A PEF.
* KVIC and Growth Ladder Fund will enlarge its M&A Fund to 2 trillion Korean Won (Approx. USD 2 billion).
* Appoint IB specialized in SME M&A.
* Encourage reorganization of companies through legislation of special laws → Facilitation of M&A of venture companies.
* KOSPI and KOSDAQ will be separated and be listed.
* Strengthen incentives for private venture investments and the establishment of fund raising and exiting ecosystem.
* Increase the range of companies that an angel investor may receive income tax deduction from.
* Reduce KVIC’s hurdle rate from 7% to 5%.
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Before this bill, Korean entrepreneurs couldn’t ask their compatriots for small investments in return for perks, the basis upon which crowdfunding exists. Their only options were to bootstrap using their own money, raise larger investments from the small-but-growing pool of VC money in Korea, or look at crowdfunding platforms abroad. Read the full article
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