Extension of Mother Fund’s Duration
A Key Policy Initiative of the Lee Jaemyung Administration
On November 21, the National Assembly’s Trade, Industry, Energy, SMEs, and Startups Committee passed an amendment to the Venture Investment Act that includes an extension of the Mother Fund’s duration.
Jung Jinwook, a lawmaker from the Democratic Party of Korea who sponsored the amendment, stated, “It is essential to prevent the suspension of key policy funds that support the AI, deep tech, and non-metropolitan venture ecosystems, and to establish a foundation for their virtually permanent operation under the control of the National Assembly.”
The extension of the Mother Fund’s duration has been promoted as a key policy initiative of the Lee Jaemyung administration to ensure a stable foundation for long-term investment in strategic industries.
During a subcommittee session on SMEs and Startups held on November 20, the core structure of Representative Jung’s proposal was adopted as the final alternative. As a member of the legislative subcommittee, Representative Jung led discussions to ensure that the industry’s demands were reflected in the system.
The Mother Fund is a national policy investment platform in which the government provides fiscal capital and co-invests with private funds to supply capital to early-stage, regional, and startup companies. However, under the current law, its duration is limited to 30 years, so the Mother Fund, which was launched in 2005, was scheduled to end in 2035. This has led to ongoing structural concerns, including the contraction of private investment, gaps in early-stage funding, and the weakening of regional venture ecosystems.
The key points of the amendment are as follows: ▲ Delegation of the fund’s duration to a Presidential Decree; ▲ Extension in 10-year increments with approval from the general meeting of fund members; ▲ Introduction of a requirement for the Minister of SMEs and Startups to report to the National Assembly in advance. These principles, including the “approval by the general meeting of fund members” and the “10-year extension structure” proposed by Representative Jung, have been incorporated into the core of the alternative legislation.
Representative Jung stated, “If the Mother Fund is terminated early while the foundation for private investment is still insufficient, the entire venture investment ecosystem could be destabilized. The Mother Fund serves as the policy priming water that drives the entire market.”
He further pointed out, “In the fields of AI and deep tech, it is difficult to achieve results without long-term investment, so there are clear limitations to relying solely on private investment. If the Mother Fund stops, it will have a serious impact on the nation’s technological competitiveness.”
He also emphasized, “As a National Assembly expert in startup and venture policy with hands-on startup experience, I have proposed policies in the committee to create a growth environment for early-stage and regional venture companies and to promote entrepreneurship.”
Finally, Representative Jung said, “This amendment establishes a stable and sustainable foundation for the operation of the Mother Fund, based on procedural controls such as National Assembly reporting and general meeting approval. I will take responsibility for ensuring its passage through the Legislation and Judiciary Committee and the plenary session.”
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