The Korea Early-Stage Investment Accelerator Association (KEAA) on Sunday welcomed the Ministry of SMEs and Startups' comprehensive plan to become a top-four global venture powerhouse, calling it "a meaningful turning point that institutionally recognizes the early-stage investment ecosystem and strengthens the virtuous cycle across the startup ecosystem."
"In this comprehensive plan, the government clearly set the policy direction for venture investment as 'building a virtuous innovation investment cycle connecting investment, exit, and reinvestment,' establishing the creation of an ecosystem where early-stage, growth, and exit phases are not disconnected as a core task," the association said. "Notably, multiple institutional improvements related to accelerators have been reflected."
The association highlighted the extension of the accelerator primary investment operation period to five years, calling it "a measure that reflects the characteristics of ultra-early-stage startup investment, enabling long-term incubation and investment aligned with company growth stages rather than short-term exit pressure."
The easing of corporate investment restrictions on individual investment partnerships is expected to lay the groundwork for more diverse private capital to flow into the early-stage investment market, potentially expanding the early investment structure that had been centered on individual investors, the association explained.
The plan also includes additional allocation and diversification of Korea Fund of Funds investment resources and a 20 percentage point increase in the venture investment limit for listed companies, which the association expects will improve strategic and long-term investment conditions for early and growth-stage startups.
The policy of recognizing overseas investment as primary investment will establish an institutional foundation for Korea's venture investment market to connect more organically with global investment flows, the association analyzed.
On the exit side, as part of policies to revitalize the secondary market, the plan sets the ratio of existing share purchases from accelerator investments within secondary funds at 20 percent. The association evaluated this as an important change that brings the early investment exit structure into the institutional framework, enhancing accelerators' reinvestment capacity and strengthening the foundation for collaboration with venture capital firms.
The association also welcomed the clearly presented policy direction encouraging long-term investment through tax measures, including extending the tax exemption period from seven to 10 years to encourage longer holding periods.
The transfer of accelerator investment statistics management authority from the Korea Institute of Startup & Entrepreneurship Development to KEAA carries significant symbolic meaning in that accelerators are now officially recognized as ecosystem participants rather than subjects of policy management, the association noted.
"This comprehensive plan is not a policy just for accelerators, but an attempt to align the entire startup ecosystem structure from early investment to growth, exit, and reinvestment," KEAA Chairman Jeon Hwa-sung said. "As voices from the field have been reflected in the system, the association will work actively with member companies to ensure these institutional improvements lead to substantive investment activation."
