-written by Minjung Kwon
Venture companies who are eager to attract capital may see the light sooner or later. On August 23, the FSC held a seminar to discuss measures to revive venture capital market. The remarkable event was held at D.camp building which in my opinion choice of the place also had a great meaning as this place was built for facilitating mutual understanding between investors and venture entrepreneurs. I, reporter of the FSC arrived ten minutes early. Reporters and related officers were already waiting for the events, expecting positive comments of FSC Chairman related to vitalizing venture capital market.
This seminar went on with presentations of several investors of venture capital and private equity fund (PEF) and with discussions about current investment environment of the Korean capital market. While venture entrepreneurs take risk of managing expensive start-up expenditure on their own without vitalized venture capital, venture capital investors also inevitably burden high risks in Korea. That’s because it takes several years to take returns from the companies and because rules and tax systems related to venture capital are unfavorable to venture investors. Investors mainly pointed out that heavy regulation of Korea prevents capital to circulate well. Regulations on venture capital overweigh venture investor’s risks, by impeding early collection of invested money through selling stocks or ownership. As a result, investments on venture companies have been more cautious, and Korea’s venture capital market has been relatively depressed.
Through the presentations and discussions, chairman of the FSC approved the opinions of venture investors. And he also agreed that regulation on investment in Korea is stricter than other developed countries, and Korea’s venture capital market strongly calls for business-friendly atmosphere. As Growth Ladder Fund which aims to make smooth circulation of investing capital was launched last month, chairman of the FSC promised that opinions from this seminar will be significantly reflected to its management.