[06/29 Venture Business News]
*The venture industry news two to three times a week… It’s hectic. I’m busy once a week, too. Funding should be completed quickly
*Number 1.. It is said that 40 GPs applied to Startup Korea Fund. What is noteworthy is that companies related to the invested private LP applied a lot, and some of them applied to areas invested by group companies. Samchully Investment (Samchully), Kakao Ventures (Kakao Mobility), Hyosung Ventures (Hyosung, Hyosung Heavy Industries, Hyosung T&C), KB Inbe (Kookmin Bank), KC Investment Partners (KC), CKD Chang-Too (Jonggeundang Holdings), Ncore Ventures (NPC), L&S Venture (Shinseong Delta Tech), IBK Venture Investment (Corporate Bank), Samsung Securities (Samsung Life Insurance, Fire), Hanwha Investment & Securities (Hanwha Total) are said to be the same. Since LP said it will conduct a second round of screening…
*Number 2.. The VC Association is sending a letter to the Ministry of SMEs and Startups to lower its main target ratio to 40%, abolish the penalty for investment projects in case of departure of key management personnel, and to recognize it as a collective investment organization so that the 49-person counting for public offering/private placement does not count for each investor. I’m not sure if the Ministry of SMEs and Startups will listen to these requests, but I think the VC Association is working hard on various activities these days. Check!
*No. 3.. Meanwhile, it is said that it is trying to clarify the provisions related to the new company by touching the still-female law. It is said that it is still at the level of service. There is an interesting ‘fact’ among the items mentioned in the article, so to speak, (1) Even if it meets the standards specified in these laws, it is not possible to invest in companies that have little to do with finance, insurance, and real estate (excluding related service industries) and new technology businesses. (2) In the case of new company, performance compensation is limited to within 20% of the investment income, but venture investment companies can set performance compensation limits autonomously.
*No. 4.. In summary, the exchange will revise the regulations to speed up the review of technical specialties and general companies. (1) Completely separate the review of technical specialties and general companies. (2) Establish a dedicated industry-specialized review system for each team, such as bio, ICT, services, and manufacturing (small manager) by dividing the list of technical companies. (3) Companies that can process priority at the beginning of the review will be given priority regardless of the order of application. (4) Activation of prior consultation with the organizer to discuss major issues in advance and induce them to apply for listing again after resolving the review issues. (5) Establishment of a special review task force team (T/F) to deploy 4 to 5 additional review personnel (currently about 20 review personnel). I should ask the IPO team if this is effective…
*No.5… Zigbang is pushing for 100 billion won in funding. What will happen after the last round’s value exceeds 2 trillion won..
*Number 6… It is said that the parent company of agri-food will change some management regulations. First of all, you can ask the GP who only runs the secondary fund about the regulations that ‘Agriculture and Forestry had to ask all GPs who had invested in the stocks that were not disposed of at the time of liquidation. I was surprised to the point where I thought, “What?” The second is to ease the regulations so that only accounting firms in the pool can receive the ‘regulation that had to be audited by the ‘representative manpower’ of one accounting firm at the Agriculture and Forestry POOL… The rest of the dogs are due diligence by P2 companies, but this is well-known for its high difficulty in managing farm mothers, but the revision of the regulations will improve it a little, right?
*No.7.. I’ll wrap up with the CVC investment of KRW 2.1 trillion in the previous year. There are up to 12 so make sure to read them!
1) 40 Start-up Korea Fund Investment Projects Challenge…A large number of LP-affiliated GPs participated
40 management companies (GP), including venture capital, have asked for 898.1 billion won in investment projects for the Private-Private Joint “Startup Korea Fund.” The funds invested by 20 private LPs and Korea Venture Investment Co., Ltd. will be 585.3 billion won, while the first evaluation will be conducted by the private LPs. It is noteworthy that 40 companies under application, 13 of Hyejung, are companies and related companies that participated as private LPs. Samchully Investment (Samchully), Kakao Ventures (Kakao Mobility), Hyosung Ventures (Hyosung, Hyosung Heavy Industries, Hyosung T&C), KB Inbe (Kookmin Bank), KC Investment Partners (KC), CKD Chang-Too (Jongundang Holdings), NPC, and L&S Venture (Shinseong Delta Tech) have applied alone. Samsung Securities applied for the super-gap sector in which Samsung Life Insurance and Samsung Fire & Marine Insurance participated as LPs as SBI Investment Cojip, and Hanwha Investment & Securities applied for the super-gap sector in which Hanwha Total Energy Solution participated as LPs. IBK Venture Investment applied for two areas as CO-GP, Kolon Inbe and Future Play, respectively. The problem is that the investment project will give additional points only to the LOC and LOI of private LPs when selecting a combination. An official from the VC industry said, “As private LPs also actively participate in the investment council, we have no choice but to bend our arms inward.”
2) VC “Please lower the target investment ratio of new shares to 40%”
The Korea Venture Capital (VC) Association will soon deliver a proposal to the Ministry of SMEs and Startups that includes ▲downgrading the investment ratio for new shares ▲deregulation of changes in key management personnel ▲recognition of investment associations as specialized investment companies. The “downgrade of the investment ratio for new shares” is a proposal to lower the proportion of new shares invested by policy funds investment projects, which is usually maintained at 60%, to the legal ratio (40%). They argue that VC’s investment and principal recovery (exit) could be more flexible if the remaining share of new shares is replaced by acquisition of old shares instead of lowering the share of new shares to 40% of the total total total formation. Regulations on changes in key management personnel are also one of the regulations that were tightening VC. If key management personnel of the company, such as the representative fund manager, leave due to reasons such as turnover, deductions will be given when selecting investment projects. It was pointed out that unlike VC, which is classified as a collective investment company, the regulations (▲recognition of investment association specialized investment companies) that are not so classified need to be revised. An industry official said, “When a company submits a securities report when issuing new shares, VC investment associations among investors must fill in all the investors of the association, but there are many cases of violating the regulations without recognizing this,” adding, “The union itself should be recognized as a collective investor to narrow the gap between regulations and reality.”