Companies under three years old took 9% of Korea's venture capital increase since 2002

Of the 6.19 trillion won added to annual Korean venture investment between 2002 and last year, companies founded within the previous three years took about 567 billion, or roughly 9% ^[1][2]. The three-to-seven-year cohort took about 2.61 trillion of the increase and companies older than seven took about 3.02 trillion ^[3][4]. Nine of every ten additional won went to a firm older than three.

Early-stage money did rise, at roughly a fifth the multiple of the total ^[5].

Korean risk capital may have left young companies as soon as it had somewhere else to go, and the Seoul Economic Daily reports criticism along exactly those lines, that venture finance is failing to perform its core function ^[15]. Or the shift is a mix effect: the cohorts are defined by company age, not by round size, so last year's early-stage total could be funding as many young firms as before through fewer and larger cheques. Kim's presentation as reported does not include the number of companies backed at each stage, so the per-company figure cannot be worked out from it.

Panelists argued that the regulatory gap between securities firms and the venture arms of financial holding companies should be narrowed to expand the supply of risk capital ^[11].

In the United States, Kim said, founders turn to law firms from the earliest stage to establish intellectual property frameworks and structure investment agreements, and those firms in turn connect them with suitable venture capital investors ^[8]. He cited Nvidia. According to a past Stanford lecture by chief executive Jensen Huang, the law firm Cooley helped set the company up at its founding in 1993, later introduced it to venture investors and went on to work on its listing ^[9]. "For venture finance to succeed at innovation, a law firm has to be there at the very foundation," Kim said ^[10].

Shin Kwan-ho, an economics professor at Korea University, put the binding constraint on the information side. "We need information infrastructure covering disclosure, accounting, taxes and revenue," he said, "so that financial institutions can properly assess technology and risk and capital can flow from companies that should exit the market to those with higher productivity" ^[13]. "Labor flexibility, basic research and development, talent development and reform of bankruptcy and rehabilitation systems must support this as well," he said ^[14].

US venture investment came to $215.4 billion in 2024 on National Venture Capital Association data, against about $8.7 billion for Korea, put at 4% of the American total ^[6]. Divide last year's won figure by that dollar figure and the implied rate is about 780 won to the dollar, so the two numbers are not converted on the same basis ^[6].

If the Korean Venture Capital Association's data shows the count of companies under three years old receiving investment holding up while the won total rose 2.4 times, the falling share describes a late-stage pool growing around them. If that count has dropped, fewer young companies are getting funded.