It has been confirmed that in the second cohort of "Startup for All" promoted by the Ministry of SMEs and Startups, an average of 300 million won in program operating expenses will be paid to incubating institutions in the general track. The budget for operating and mentoring the second cohort's general-track program is 96 billion won, more than seven times the first cohort's 12.4 billion won, expanding the funds injected into incubating institutions. Experts noted that the budget structure should be guarded against drifting toward an "institution-centered project."
According to the "Startup for All second-cohort budget breakdown" obtained by ChosunBiz from the office of Kang Seung-gyu of the People Power Party on the 26th, the second-cohort budget for Startup for All is set at about 200 billion won. That is more than triple the first cohort's 62.8 billion won. Of this, the second cohort's general-track program operating budget is 82 billion won, and 250 incubating institutions will each receive about 328 million won in operating expenses. The first cohort's general-track program operating budget was 6.76 billion won, but it increased by roughly 12 times in the second cohort.
The second cohort of Startup for All expanded the number of selected participants from 5,000 to 10,000 and increased the budget by strengthening the re-challenge function and expanding operating institutions. It will also support re-challenge mentoring along with idea-improvement feedback for 57,000 people who applied in the first cohort but were not selected. However, due to the impact of a personal information leak on the 15th, the launch of the second cohort has been tentatively postponed.
Although the program is designed to support entrepreneurs by operating programs such as re-challenge support, in the second cohort's general track, the program operating and mentoring budgets exceed the budget for direct support to entrepreneurs (policy beneficiaries). Combining the 82 billion won in program operating expenses and the 14 billion won mentoring budget totals 96 billion won, more than double the 40 billion won entrepreneur support budget composed of startup activity funds and commercialization funds. In the first cohort, the entrepreneur support budget (16.6 billion won) exceeded the program operating and mentoring budget (12.4 billion won).
Given the sharp increase in operating expenses for incubating institutions and the mentoring budget in the startup-support industry, observers say a system is needed that can produce tangible outcomes such as attracting investment or commercialization.
Kim Yong-jin, a professor of business administration at Sogang University, said, "Currently, venture capital is also based on the government's fund of funds, so dependence on the public sector is high, and Startup for All is designed this way as well," adding, "It could end up being used to increase institutional sales and subsidize labor costs."
Given the budget structure, some say the support effect felt by founders hinges on the quality of mentoring. If mentoring and idea-improvement feedback are poor, the support effect perceived by entrepreneurs will also be weak. In fact, among first-cohort passers, some reacted, "Mentors came in knowing nothing about my business plan," and, "High-quality mentoring looks difficult."
Choi Byung-chul, president of the Korea Academic Society of Venture and Startup, said, "In mentoring projects, the number of sessions and other factors can be prioritized according to public institution evaluation indicators," adding, "The focus should be on implementing commercialization, such as test-bed support, so that ideas can actually be realized."
The Ministry of SMEs and Startups (MSS) drew a line, saying the Startup for All project is not intended to provide allowances or revenue for incubating institutions or mentors.
Multiple officials at the Ministry of SMEs and Startups (MSS) said, "(Starting a business) is not something that works just because the government spends hard, and it is difficult to proceed without the will and cooperation of the startup ecosystem." They added, "Startup for All has a fundamental principle that mentors and institutions select whom to incubate and then incubate them," and, "Mentors are the face of each institution, and if, from the participant's perspective, mentors are deemed not to be fulfilling their role, the participant can ask the institution to replace them."
Kang Seung-gyu of the People Power Party said, "Startup for All is a project for aspiring entrepreneurs who take on challenges, not for institutions," and noted, "Budget execution must be carried out with an entrepreneur-centered approach so the project's intent is not undermined."