This article was published on April 30, 2025, at 5:08 p.m. on the ChosunBiz MoneyMove site.
SJ Venture Investment, Solborn Investment, and Asia Startup Investment have been excluded from the member list of the Korea Venture Capital Association (hereafter referred to as the VC Association). These venture capitals (VCs) reportedly failed to establish new venture funds amid a shrinking venture investment market and were unable to even pay their association fees.
According to the VC industry on the 30th, the VC Association recently expelled three VCs—SJ Venture Investment, Solborn Investment, and Asia Startup Investment—from its member list. Earlier, at the beginning of this year, the board of directors of the VC Association voted to expel these three VCs, and after a general meeting, they reached a final decision to expel them.
This is the first time the VC Association has directly expelled its member companies. The VC Association, established in 1989 by VCs with the goal of improving the system and management environment related to the VC industry, has only adjusted its member list due to 'withdrawals,' 'closures,' and 'disqualifications' since its founding.
The non-payment of fees has led to this unprecedented expulsion. The VC Association has a regulation that allows expulsion of members who have not paid fees for more than two years through a general meeting resolution, and it is reported that Solborn Investment has not paid fees for over 10 years, from 2011 to last year. The industry believes that Solborn likely did not lack funds but rather had no intention to pay.
SJ Venture Investment and Asia Startup Investment have reportedly not paid their fees for over two years due to poor management performance. The VC Association also proposed to waive all unpaid fees if they confirm payment in the future, but it is reported that all three companies were unable to accept this offer.
The three VCs expelled from the VC Association are currently facing difficulties in pledging to pay their dues. This is because the cold wave in the venture investment market due to high interest rates and economic recession has led to repeated failures in establishing new venture funds. VCs are not receiving management fees, which are their main source of revenue.
Solborn Investment and Asia Venture Investment have no venture funds currently in operation. At least SJ Venture Investment is managing a project fund of 2.9 billion won established in 2018. However, even this fund has faced a situation where it could not receive management fees after its maturity on April 15.
The possibility of establishing new venture funds in the future is also low. Presenting recent investment performance metrics is essential for establishing new venture funds. Furthermore, due to the recent contraction of the exit market, including listings, there is a growing trend where funds are only concentrated in large VCs that have established performance metrics.
The market expects that the expulsion of member companies from the VC Association will continue to increase. As uncertainties at home and abroad grow, major investors, such as financial institutions and private companies, are reducing venture investments. Last year, the number of domestic VCs that successfully established new venture funds was less than half of the total.
According to the electronic disclosure of venture investment companies (DIVA), 120 VCs established and registered new venture funds last year, accounting for only 48.2% of the total 249. This means that fewer than one in two VCs established new venture funds, marking the first time the formation ratio has fallen below 50% since 2020.
Due to this situation, administrative actions from the Ministry of SMEs and Startups against capital-deficient VCs are increasing. VCs with a capital deficiency rate of over 50% will face demands for capital increases and restrictions on dividends from the Minister of SMEs and Startups, with 11 companies receiving such improvement requests last year. In 2023, this number was eight.
A source in the VC industry noted, "Small VCs are almost unable to form funds," adding, "If small VCs repeatedly miss investment opportunities due to a lack of funds or are entirely expelled from the market, it could harm the diversity and innovation of the venture ecosystem in the long term."