[Q&A] "Investment Analyst? Works Like a Cheetah" FuturePlay Director Choi Jae-woong

Joined in 2018... Deep Tech Startup Discovery and Investment Specialist
"No Rosy Valuations" "If No Profit, Company Value Collapses"
Innospace Preparing for First Test Launch in Brazil
Futureplay Portfolio Includes 200+ Companies with 94% Survival Rate

"I like to compare investment analysts not to hardworking oxen, but to cheetahs. Usually, they rest under a tree, but once they spot a target, they sprint at full speed to catch it."

Choi Jae-woong, a director at FuturePlay, a startup accelerator (AC), who has been an investment analyst for five years, described his job this way. He discovers promising deep-tech startups, invests in them, and manages them afterward. When asked what deep-tech means, he defined it as "technology that others cannot replicate." So far, none of the startups he has invested in have gone through liquidation or closed down. He said, "Startups with core technologies can enter 'survival mode' during tough market conditions by participating in government projects or taking on contracts." He expressed regret over the government's reduction of the mother fund budget, which serves as seed money for startup investments.

Below is a Q&A with Director Choi.

- What led you to choose the profession of an investment analyst?

▲ The decisive factor was recommendations from people around me. I am not the type to enjoy research like a scholar, nor do I have the personality to work in a large corporation just to make a lot of money. Three friends who have known me for a long time commonly said, 'You would be suitable for working at a venture capital (VC).' I applied to about five places, and FuturePlay was the first to offer me a position. I joined in 2018 when the concept of VC was not well known and have been working as an investment analyst ever since. Thinking about it, this job feels like my calling.

- What kind of work did you do initially after joining?

▲ When senior analysts brought deals, I reviewed contracts, wrote investment review reports, and conducted research. It was a kind of apprenticeship training. I handled two to three deals a month and lost track of time. Although it was a grueling job that I would not want to repeat, I appreciated learning a lot in a short period. After becoming familiar with the work, I spent my spare time meeting startup CEOs. If I found promising companies, I conducted investment reviews myself. It took about seven to eight months after joining before I handled my first deal.

- What are the duties of an investment analyst?

▲ The basics are to discover and review deals well, execute investments, and manage them afterward. To find good companies, I visit universities like Seoul National University and KAIST, where tech startups cluster, or startup spaces like the 'AI Yangjae Hub.' Startup CEOs I have already invested in sometimes introduce other founders. Also, since investment funds are necessary, I often go around requesting capital contributions, like a mother bird bringing food.

- How do you perform your duties as an investment analyst?

▲ There is no fixed start time. We operate with remote work and flexible hours. In other words, attendance is not strictly monitored. I like to compare it to working like a cheetah rather than a hardworking ox. Usually, you rest under a tree, but when you spot a target, you sprint at full speed to catch it. However, you must remember that if you fail to hunt several times, you could starve. You also need the ability to negotiate appropriately with startup CEOs and handle competition from other investors. When creating funds, there is a process of persuading companies and high-net-worth individuals.

- I heard you focus on sales when deciding to invest in a company.

▲ It is true that I place importance on sales. I consider where and how the company can generate sales and whether it is likely to do so within two to three years. For example, Innospace, which I first invested in 2019, is a space launch vehicle startup preparing for its first test launch next month at the Alcantara Space Center in Brazil. This company develops small satellite launch vehicles and launch services to transport them into orbit. It is called the 'Korean version of SpaceX' and has attracted public attention.

- Are there other successful investment cases like Innospace?

▲ Proxy Healthcare is a startup that has generated sales within one to two years of investment. This is thanks to its unique technology that effectively removes dental plaque and tartar using electromagnetic waves. They developed a microcurrent toothbrush and recorded sales of 1 billion KRW last year, expecting 5 billion KRW this year. Deep-tech is not something grandiose but technology that others cannot replicate. If a company develops technology so difficult that even large corporations fail to imitate it, its value should be recognized.

- Are there any failed cases among the companies you invested in?

▲ None of the companies I invested in have gone through liquidation or closed down yet. Tech startups tend to have higher survival rates than service companies. Since they possess core technology, they can enter 'survival mode' when the investment market freezes, like now. They can participate in government projects or take on external contracts. Through this process, they learn the market and improve development capabilities. FuturePlay has invested in a cumulative portfolio of 205 companies, with a survival rate of about 94%. Considering the company was established in 2013 and has operated for about eight years, and only 6% of invested companies have closed or liquidated, the failure rate is very low.

- How is the current venture and startup investment atmosphere?

▲ Until six months ago, there was a trend of high company valuations, but such 'rosy valuations' will no longer exist. We are witnessing cases where company valuations collapse if they do not make real money. It is time for company valuations and performance to align. Companies should approach fundraising with realistic expectations. The unstable market has made it difficult to request capital contributions. Large corporations say that even if they want to invest, getting approval from their finance departments is burdensome.

- What do you hope the government will do to revitalize the startup investment ecosystem?

▲ It is regrettable that the mother fund budget was cut to 313.5 billion KRW next year. The mother fund acts as seed money for startup investments. As the seed money decreases, investments from large corporations and others also decline. If increasing the mother fund budget is difficult, expanding tax benefits for investing companies could be an alternative. Also, recently, Middle Eastern countries have shown great interest in Korean startups. I hope the government will play a role in opening the door for oil money to flow into domestic startup investments. I appreciated the recent efforts by the Prime Minister's Office to meet portfolio companies directly, listen to their requests for regulatory improvements, and work to fulfill their wishes.

- What is your goal as an investment analyst?

▲ Recently, about 50 portfolio company CEOs attended a workshop together. They networked, exchanged information, and introduced talent to each other. A supportive and collaborative atmosphere naturally formed. FuturePlay aims to contribute as much as possible to startup CEOs who need early-stage investment and grow together. We do not want to just provide money and stand aside financially but want to think about better directions for each other and achieve a win-win situation.