[K-INVESTORS] KVCA Chairman Hakkyun Kim: "Venture Powerhouse Impossible Without KOSDAQ Normalization... 30 Trillion Won Fund Plan Nears Completion"

Interview with VC Association Chairman: 100 Days Since Inauguration and Launch of New Administration
"As Soon as the Cabinet Is Formed, I Will Advocate for the 'KOSDAQ Fund'"
Stable Funding Possible Only with Institution-Centered Investment
Government Must Show Commitment to Adopting Domestic AI Technology

"The 'venture powerhouse' promised by the Lee Jaemyung administration cannot be realized if the damaged KOSDAQ market is left as it is. Only when KOSDAQ serves as a launchpad for venture companies can global unicorns like Tesla emerge from Korea."

The new administration has declared its intention to make Korea one of the "top three AI powerhouses." The government plans to inject large-scale budgets to help promising startups and venture companies grow, and will ease regulations to attract more private capital into the venture investment industry. However, the venture capital (VC) industry emphasizes that there are challenges that must be addressed first for these policies to be effective.

Hakkyun Kim, Chairman of the Korea Venture Capital Association (KVC Association). KVC Association

"KOSDAQ Fund: The Key to Virtuous Cycles in the Venture Ecosystem"

Hakkyun Kim, Chairman of the Korea Venture Capital Association (KVCA) and CEO of Quantum Ventures Korea, said in a recent interview with Asia Economy, "A virtuous cycle in the venture ecosystem?comprising the discovery of innovative companies, investment, exit, and reinvestment?is essential. Even if we inject 20 trillion or 30 trillion won, if the exit market remains blocked as it is now, investment capital cannot flow back into venture and innovative companies, leading to stagnation in entrepreneurship, investment, and innovation." He stressed, "The top priority is to ensure that KOSDAQ functions properly as a market where investment funds can be successfully recovered."

As a measure to revitalize KOSDAQ, Kim proposed the creation of a "KOSDAQ Fund" worth 30 trillion won. Major institutional investors (LPs) would take the lead in forming the fund, with private sector participation following. The aim is to shift the supply of liquidity in the KOSDAQ market from individuals to institutions, which are long-term investors. Currently, KOSDAQ is dominated by short-term trading, where large volumes of IPO shares are sold immediately after listing to pursue quick profits, making it difficult for venture companies to secure stable capital.

Kim emphasized, "If the KOSDAQ Fund is established, long-term investors focused on fundamentals will enter the market, enabling venture companies with strong technology or growth potential to attract growth capital. This will create an environment where entrepreneurs and investors can take on challenges, increasing the likelihood of producing global companies."

Hakkyun Kim, Chairman of the Korea Venture Capital Association (KVCA). KVCA

Progress in Detailed Plans Including Funding

The plan for securing the 30 trillion won fund is nearly complete. This is the result of establishing a policy committee directly under the chairman immediately after taking office in February, laying the organizational foundation for the KOSDAQ Fund, and pushing forward with practical efforts for over 100 days. Kim said, "We have developed detailed plans to ensure that the 30 trillion won does not remain just a slogan, and significant progress has been made. We intend to minimize the fiscal burden as much as possible and will bring the issue to the table as soon as the government counterpart is determined."

Although many long-standing industry demands, such as allowing retirement pension funds to invest in venture capital and introducing Business Development Companies (BDCs?listed closed-end funds that raise capital through public offerings to invest in unlisted venture companies), were included in President Lee Jaemyung's campaign pledges, the KOSDAQ Fund was omitted. Kim stated, "I believe the government and the National Assembly will fully understand the purpose of the proposal. As soon as the cabinet is formed, I plan to meet with them to explain the importance of this issue." He added, "With the new administration launching while the chairman's drive is still strong at the beginning of my term, I expect it will have a positive impact on policy implementation."

Regarding measures to improve the investment environment for deep tech sectors such as AI, Kim said, "The government must present a clear policy direction and roadmap for core technology fields like AI from a long-term and strategic perspective, and must declare its commitment to actively adopt a certain proportion of domestic technologies. Bold policy decisions that anticipate the future, such as the past commercialization of CDMA (Code Division Multiple Access), will provide the foundation for an innovative ecosystem and global competitiveness."