Korea Startup Accelerators and Early Stage Investors Association (K-AIA) said on the 18th that it welcomes the "comprehensive plan to leap to the four leading venture nations" that the Ministry of SMEs and Startups released.
The association issued a commentary the same day and said it is "a meaningful turning point that institutionally recognizes the early-investment ecosystem and strengthens a virtuous cycle across the startup ecosystem."
In particular, the association said, "The government clearly presented the direction of its venture investment policy as 'building a virtuous cycle of innovation investment that connects investment–exit–reinvestment,'" and emphasized that it "set as a core task the creation of an ecosystem in which the early, growth, and exit stages are not disconnected."
The association also noted that, regarding accelerators (ACs), numerous regulatory improvements were reflected.
The association said, "Regulatory improvements include extending the operating period for ACs' primary-purpose investments to five years," and explained, "This is a realistic measure that reflects the nature of ultra-early startup investment, enabling long-term incubation and investment tailored to corporations' growth stages, rather than short-term exit pressure."
It added, "By easing restrictions on corporate contributions to individual investment associations, a foundation has been laid for more diverse private capital to flow into the early-investment market," and said, "This is expected to serve as an opportunity to expand the early-investment structure, which had been centered on individuals, by one step."
The association also said, "This plan includes additional allocation and diversification of funding sources for the Fund of Funds and raising listed companies' venture investment limit to 20%, which will improve conditions for strategic, long-term investment in startups at the early and growth stages."
In this comprehensive government plan, on the exit side, as part of policies to vitalize the secondary market, it also includes setting the proportion for purchasing existing shares of AC investment within secondary funds at 20%.
The association assessed it as "an important change that brings the early-investment exit structure into the institutional fold, increases ACs' capacity for reinvestment, and strengthens the basis for collaboration with VCs." It added, "On the tax side, the policy direction was clearly presented to encourage long-term investment, such as extending the tax-exempt holding period from seven to 10 years."
The association also said, "It is of great symbolic significance that this plan includes transferring the authority to manage AC investment statistics from the Korea Institute of Startup and Entrepreneurship Development (KISED) to Korea Startup Accelerators and Early Stage Investors Association (K-AIA), as it means ACs are officially recognized not as subjects of policy management but as actors in the ecosystem."
Jeon Hwa-seong, head of Korea Startup Accelerators and Early Stage Investors Association (K-AIA), said, "This comprehensive plan is not a policy only for ACs, but an attempt to align the structure of the entire startup ecosystem from early investment to growth, exit, and reinvestment," and added, "As much as voices from the field have been reflected in the system, the association will take the lead with member companies so that these regulatory improvements can lead to tangible investment activation."