This article was published on Sept. 2, 2025, at 7:19 a.m. on ChosunBiz MoneyMove site.
The size of venture funds has been found to affect revenue. An analysis of the liquidation revenue multiples of venture capital funds backed by the government fund showed that large funds with a total commitment of over 500 million won significantly outperformed the liquidation revenue multiples of small and mid-sized funds.
On 2nd, according to the liquidation revenue multiple status of venture capital funds backed by the government fund obtained through the office of People Power Party lawmaker Kang Seung-kyu, the revenue multiple of large funds with a total commitment of over 500 million won was 1.6 times, surpassing that of small (under 150 million won) and mid-sized (150 million won to 500 million won) funds at 1.2 times.
Since the establishment of the government fund aimed at rebuilding the domestic venture investment market in 2005, a survey on all 308 venture investment funds that were liquidated after funding revealed that the number of large funds was 48, while mid-sized and small funds totaled 151 and 109, respectively.
It was found that the government fund pledged a total of 472 billion won, averaging 9.8 billion won per large fund, receiving a distribution of 822.7 billion won. It recorded a revenue rate of over 74%, showing better performance compared to mid-sized funds, which received a total distribution of 1.47 trillion won after a contribution of 1.16 trillion won (about 27%).
There is an analysis suggesting that economies of scale operate in venture funds. As the scale of operations increases, access to quality investment opportunities improves, and competitiveness is secured in diversifying investment portfolios and participation in follow-up investments, leading to revenue rate differences in final operational results.
Above all, large funds have an advantage in having more opportunities for failures. Venture investing is a market governed by the so-called "Power Law," where a small number of hits can yield returns of 5 to 20 times or more, making scale a competitive factor.
Indeed, a large fund topped the revenue rates among the 308 liquidated funds. The 500 million won "K-Contents Specialty Investment Association" liquidated by KNET Investment Partners last August distributed 26.22 billion won, which is 13.1 times the amount contributed to the government fund (2 billion won), thanks to its investment success in KRAFTON.
Overseas, especially centered around the United States, the expansion of venture fund sizes has already progressed. According to PitchBook, the average operational scale per individual venture capital firm (GP) in the U.S. was about 460 billion won, significantly surpassing Korea's average of about 30 billion won per GP. In Europe, mega funds exceeding 1 trillion won are emerging.
There is also criticism that it is time to change the structural limitations of small-sized Korean venture capital firms that have a large number but small scale. In particular, the Korean venture investment market, operated primarily by policy funds such as the government fund, has developed by distributing small amounts to more venture capital firms, resulting in a lack of venture funds greater than 1 trillion won.
Lawmaker Kang Seung-kyu said, "It is time to concentrate on enabling competitive operators to manage larger funds rather than dispersing funds to maintain the number of venture capital firms," adding, "Discussions on extending the lifespan of the government fund or redefining its role are also needed."