Korea Venture Investment Presents Research on Mother Fund and Venture Finance at Academic Conference
"Social Capital Important for Solo Entrepreneurs" "Early-Stage Investment Has Positive Effect"
[Asia Economy Reporter Kim Bo-kyung] The government’s foundational fund, which has been ongoing for 17 years, showed outstanding investment performance for funds established after the 2008 global financial crisis. It was found that stock market conditions at the time of fund formation and the presence of professional management personnel were key factors.
Korea Venture Investment announced on the 18th that it presented research findings on foundational funds and venture finance during a joint session with the Korea Securities Association at the 24th 'Korean Academy of Management Convergence Academic Conference.'
The Korean Academy of Management Convergence Academic Conference was co-hosted by the Korean Academy of Management and others, and organized by Jeollanam-do Province and Yeosu City. It was held from the 16th to the 18th at the Yeosu Expo Convention Center in Jeollanam-do.
Korea Venture Investment presented research results on △ determinants of profitability for foundational investment funds △ the impact of social capital on the management performance of one-person creative enterprises △ the effect of venture capital investment in the early stages of startups on their growth, followed by expert discussions.
Analyzing foundational investment funds that completed liquidation from 2004 to 2021, it was found that funds established △ after the 2008 global financial crisis △ focused on M&A and secondary investments △ with fund sizes over 100 billion KRW or under 10 billion KRW △ and with management periods under 7 years showed outstanding investment performance.
In particular, for funds with excellent performance, stock market conditions at the time of formation and the ratio of professional management personnel at the management company were important factors.
Analyzing the difficulties and management performance of one-person creative enterprises, it was confirmed that social capital?such as financial support and advice from experts and institutions in related fields?is crucial to increasing the survival rate of new businesses.
Startups receiving venture capital investment in their early stages showed positive effects compared to those that did not, including external growth, R&D investment and patent acquisition, and subsequent fundraising. Additionally, the effect of early-stage venture capital investment was greater in manufacturing industries than in service industries.
Lee Jin-seok, Director of the Venture Finance Research Center at Korea Venture Investment, stated, "Going forward, Korea Venture Investment will continue to conduct various studies in the venture finance field based on data accumulated over 17 years of managing foundational funds, and contribute to the development of the venture investment ecosystem through ongoing academic exchanges."
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