6 out of 10 Accelerators Say "This Year's AC Ecosystem Worse Than Last Year"

Half of Accelerators Reported Negative Sentiment Last Year
Industry Calls for Improved Investment Environment and Deregulation

Six out of ten domestic accelerators (AC) forecast that the AC ecosystem will deteriorate this year due to difficulties such as securing investment funds.

The Korea Early-Stage Accelerator Association released the "2024 South Korea Early Startup Investment Industry Ecosystem Survey Report" on the 17th, containing these findings. The report was based on a survey conducted from December 24 last year to the 17th of last month to collect opinions on the AC and early startup investment ecosystem environment and future policy directions, with a total of 104 industry professionals participating in the responses.

Last year, the perceived ecosystem atmosphere worsened compared to the previous year. The positive response rate decreased by 10 percentage points from 27% to 17%, while the negative response rate increased by 8 percentage points from 42% to 50%. Particularly, negative evaluations were predominant across the startup investment market environment, startup business environment, government accelerating programs, and accelerator business environment.

The industry's most important issues were identified as the "continuation of the venture investment winter (28.1%)" and "reduction in research and development (R&D) budgets (24.7%)." Other concerns included "the crisis and demand for change in TIPS," "AC and venture capital (VC) double licensing," and "withdrawal of accelerator Top Tier listings."

Regarding the perception of the venture investment joint guarantee system, negative opinions accounted for 70.2%. The most common opinion, at 39.4%, was to "maintain the current system," while 32.7% responded that "the Venture Investment Promotion Act (Venture Act) should explicitly prohibit joint guarantees by founders." Additionally, the need for policy improvements to protect founders was raised.

Sixty-one point five percent of respondents expected the accelerator ecosystem to worsen this year. Negative views were particularly high regarding securing investment funds and revitalizing the exit market. However, there were some positive expectations about the increase in promising startups and the growth of investment and incubation professionals.

The most urgent policies to be supplemented were easing the mandatory investment ratio (20.7%), expanding the dedicated fund of funds for startup planners (17.4%), and activating secondary funds (13.2%). The startup investment sectors expected to attract the most attention this year were artificial intelligence and deep tech (29.6%), robotics (10.4%), environment and climate (8.8%), and healthcare (7.5%), in that order.

Respondents proposed various policy improvements, including improving the investment environment, deregulation, establishing differentiated policies between AC and VC, expanding AC-dedicated fund of funds, and activating secondary funds.

The association stated, "Based on the results of this survey, we will actively strive to reflect the industry's voice in policies and promote the sustainable growth and co-evolution of South Korea's early startup investment industry."