South Korea to reform venture capital to spur exits and attract foreign funds
Kim Hak-kyun, the president of the Korea Venture Capital Association (KVCA), delivered a briefing on the association’s one-year since taking office. The event took place at The Westin Seoul ParnaS hotel in Gangnam, Seoul, and was attended by reporters to review the group’s achievements and next steps.
He said that for Korea’s venture investment ecosystem to rise to the next level, two areas must be activated: the exit market and the supply of investment capital. Since assuming the role last year, he has advocated policy changes as part of the government’s broader plan to make Korea a leading nation in venture investment.
A core priority he flagged is reviving the KOSDAQ market, the Korea Exchange’s platform for smaller growth companies. He proposed widening institutional investor participation by linking a National Growth Fund to create a “KOSDAQ Activation Fund” to inject liquidity into venture exits, with the aim of a virtuous cycle where exited funds flow back into startup investments.
On regulatory reform, he advocated easing overly tight lockup rules for new KOSDAQ listings and refining technology-focused listing rules so technology strengths can drive listings. He pledged to push for policy changes with relevant government bodies and to broaden the market for trading venture stakes through secondary offerings and related mechanisms.
Funding expansion also featured prominently. He called for broader venture fund resources by engaging pension funds, banks, and private investors, and by tapping new sources such as university endowments and family offices. He indicated that easing risk weights for venture investments could encourage banks to participate more actively.
The plan also envisions stronger policy leadership centered on VC, including greater autonomy for venture funds to pursue post-IPO follow-on investments and a reform of investment contracts toward more opt-in structures. He signaled ongoing efforts to expand the use of alternative investment vehicles like Business Development Companies (BDCs) and to move toward tokenized securities (STOs).
Together, these proposals reflect Korea’s broader push to scale its venture ecosystem, a trend with implications for international investors and technology firms seeking regional access or collaboration in Asia. KVCA’s policy agenda could reshape how Korea funds and exits startups, with potential cross-border effects on investment flows.
For U.S. readers, the reforms matter because Korea is a significant player in global tech supply chains and a growing hub for startups in areas like semiconductors, software, and biotech. A more active exit market, diversified funding sources, and new investment vehicles could attract more foreign capital, enable closer U.S.–Korea co-investments, and influence the pace and cost of technology innovation accessible to American markets and firms.