Discussion on the Round Table Findings

1
Session 3 Discussion on the Round Table
Findings Recommendations and the Way Ahead
The Impact of the Global Crisis on the Korean VC
Market Policy Measures and VC Behavior
Jeong-Suk Koh President Ilshin Investment Co.,
Ltd. Korea
2
VENTURE COMPANIES
NUMBER OF VENTURE COMPANIES WITH SALES OF OVER
USD 71 MIL
NUMBER OF VENTURE COMPANIES
15,401
14,015
12,098
11,392
9,732
8,798
8,778
7,967
7,702
4,932
2,042
98
99
00
01
02
03
04
05
06
07
08
The statistics have been compiled through the
Venture Certification Program, which was
introduced through the legislation of Act in
Special Measures for the Promotion of Venture
Businesses in 1997. USD 1 KRW 1,400
Source Small and Medium Business Administration
(SMBA)
1
3
VC INVESTMENT
LOAN vs VC INVESTMENT(08) Unit USD bil.
VC INVESTMENT AS PERCENTAGE OF GDP(07)
302.8
0.22
0.13
34.9
9.0
2.6
US
KOREA
Loan
Policy Loan
VC Investment
Credit Guarantee
As of 2007
Source Korea Venture Capital Association (KVCA),
Ernst Young, National Venture
Capital Association (NVCA), Financial Services
Commission
2
4
FUND RAISING
VC FUNDS RAISED BY YEAR Unit USD mil.
ACCUMULATED AGGREGATE CAPITAL Unit USD bil.
5.50
5.41
5.15
4.89
4.83
4.71
4.64
1,024
4.50
1.72
4.38
2.18
Funds
782
2.41
687
3.51
4.03
648
3.40
639
2.78
3.54
3.78
565
3.07
494
485
471
3.23
2.42
1.60
1.43
VCs
1.24
1.20
1.35
1.12
00
01
02
03
04
05
06
07
08
00
01
02
03
04
05
06
07
08
General partner contribution to VC funds
excluded

Source KVCA
3
5
VC FUND INVESTORS BY TYPE
KOREA(9908)
US(9903)
Corporations
Individuals
Organization
4.6
0.4
Individuals
4.9
Foreign Investors
10.0
6.5
Government
VCs
24.5
Pensions
13.0
42.1
Endowments
Pensions
20.3
Corporations
13.9
18.6
Financial Insurance
Financial Insurance
22.7
18.5
The National Pension Act was revised in 2001
and the National Pension Corporation started to
invest in VC funds in 2002 Equivalent to
general partner contribution to VC funds
Source KVCA, NVCA
4
6
VC INVESTMENT
INVESTMENT BY STAGE(08) 100 USD 517.6 mil.
INVESTMENT BY YEAR
Number of Invested Companies
Amount USD mil.
1,443
1,910
00
1,119
01
636
Later Stage
441
768
02
24.7
Early Stage
450
03
630
40.1
431
544
04
Expansion Stage
540
635
05
35.2
06
617
523
615
07
708
08
496
517
Source SMBA
5
7
EXIT
EXIT BY TYPE, 2008 Percentage
NUMBER OF IPOs AT KOSDAQ
KOREA
US
2.4
8.4
1.6
5.7
4.2
8.9
MA
MA
58.2
73.3
78.7
78.5
79.5
96.7
98.4
97.6
95.8
94.3
91.6
91.1
IPO
41.8
26.7
21.3
21.5
20.5
IPO
3.3
03
04
05
06
07
08
03
04
05
06
07
08
Source KVCA, NVCA
6
8
POLICY MEASURES AND VC BEHAVIOR

• Fund Raising Policy Measures
• Korea Fund of Funds taking a much larger share in
  venture funds launched in 2009
• Planning to increase the size of Korea Fund of
  Funds up to 1.1 bil. by 2012 (from
  450 mil. as of 2008)
• Investment VC Behavior
• Tighter monitoring on portfolio companies
• More follow-on investment than before
• Change in industry focus further shrinking IT
  sector whereas green growth industries on the
  rise
• Diverse investment profile/stage focus from
  early stage to consolidation/restructuring plays
• Holding up cross-border investments
• Exit Policy Measures
• Activation of MA market
• Further enhancement of KOSDAQ

7