This article was published on Oct. 28, 2025, at 4:32 p.m. on the ChosunBiz MoneyMove site.
Korea Venture Investment Corporation has begun reviewing a conversion to a government-affiliated corporation under direct government control as it seeks to make the mother fund's duration permanent. The goal is to establish a stable operating structure in which the government is a direct shareholder, moving beyond the layered governance of the state (Ministry of SMEs and Startups)–Korea SMEs and Startups Agency (KOSME)–Korea Venture Investment Corporation.
In particular, Korea Venture Investment Corporation has been reported to be considering a structure similar to sovereign wealth funds such as the Korea Investment Corporation (KIC), and to have discussed legislation to provide a legal basis. However, some critics say it is an organizational preservation strategy to make the institution permanent under the pretext of stable operation.
According to the venture capital industry on the 29th, Korea Venture Investment Corporation recently sketched a long-term plan calling for conversion to a government-affiliated corporation funded directly by the government. It also reviewed a concrete execution roadmap, including separate legislation to provide a legal basis and plans for changing the majority shareholder.
The idea of converting to a government-affiliated corporation was contained in an internal report recently published by Korea Venture Investment Corporation titled "Establishing a strategy to improve the mother fund for the development of the venture ecosystem." It was the result of a study on "Amendments and codification of the Venture Investment Act" conducted in May, and the law firm Mission carried out the purpose-specific research.
Korea Venture Investment Corporation began in 2005 as a public institution under the Ministry of SMEs and Startups. It was introduced as the manager of the mother fund to rebuild the domestic venture investment market, which became a wasteland after the dot-com bubble burst in 2000, and it invests government investment funds in venture investment funds.
Korea Venture Investment Corporation's commissioned report listed several grounds for corporatization: strengthening practical execution of the policy fund unification policy, establishing a stable operating structure for the mother fund, enhancing the ethics and market surveillance functions of the venture finance market, and ensuring smooth recruitment of outstanding personnel.
Korea Venture Investment Corporation is said to be particularly concerned that government ministries that invest in the mother fund might withdraw. Although the supervising authority is the minister of SMEs and Startups, the actual majority shareholder is Korea SMEs and Startups Agency (KOSME), so returns from mother fund operations do not flow back to the investing ministries.
The report said that actually "although multiple ministries and public institutions invest in the mother fund, dividends go only to KOSME as the sole shareholder, so investing ministries do not take revenue," and added that "government ministries are trying to establish and operate their own independent policy mother funds."
In the report, Korea Venture Investment Corporation argued that KOSME has a broad aim of promoting small and medium enterprises while Korea Venture Investment Corporation pursues the specialized policy goal of promoting venture investment, so their primary business purposes differ and there is little functional overlap with existing public institutions.
Korea Venture Investment Corporation said that by converting to a government-affiliated corporation so the government can hold shareholder rights directly and take dividend revenue, that revenue could be recycled as funds for venture-related policies, strengthening the practical execution of the policy fund unification policy, and that separate legislation would be necessary.
The report also included the possibility of expanding as a sovereign wealth fund. It said it was aiming for a form similar to the Korea Investment Corporation and added, "sovereign wealth funds are run by the government and aim to generate revenue; although distinct from the mother fund, they could increase national assets through venture investment."
The report also proposed that the mother fund's duration (currently set to expire in 2035) be made "permanent." The mother fund, established in 2005 based on the Enforcement Decree of the Venture Investment Promotion Act, was granted a temporary 30-year role aimed at transferring its role to the private venture capital market.
Korea Venture Investment Corporation currently argues that "the role of policy funds in the venture investment market remains essential, and the duration should be deleted or effectively made permanent through repeated extensions." It noted that if the mother fund disappears, Korea Venture Investment Corporation would also find it difficult to continue.
Industry observers say Korea Venture Investment Corporation is using research designed at the request of policy makers to aim for institutional perpetuation. Using the rationale of unifying supervision and investment rights, it seeks to shed its status as a subsidiary of KOSME and be promoted to a government-affiliated public institution under direct government control.
A venture capital industry official said, "Korea Venture Investment Corporation has consistently wanted to retain its role as a major player in the venture and start - up investment market based on the argument that the current market has not grown sufficiently," and added, "Conversion to a government-affiliated corporation is likely its most desired long-standing goal."
Meanwhile, Korea Venture Investment Corporation said, "It is true that we conducted a study to improve the layered governance from the state (Ministry of SMEs and Startups)–Korea SMEs and Startups Agency (KOSME)–Korea Venture Investment Corporation," but added, "Conversion to a government-affiliated corporation was only one option that came out of the study and we have not conducted concrete reviews."