Seoul's 150 Trillion Won Fund Won't Fix Korea's Tech Financing Alone

By Daniel Okafor

South Korea plans to pour 150 trillion won into a National Growth Fund over five years. Experts warned on October 27 that the money will not reach deep-tech companies unless the country rebuilds how venture financing itself works.

The warning came at a Technology Commercialization Policy Co-Lab held by the Science and Technology Policy Institute (STEPI) and the Korean Economic Association at D.Camp Mapo in Seoul's Mapo District. The theme: "Innovative Capital Transformation for Leaping into the Global Top Three Economies." Speakers argued that adjusting investment periods, risk-sharing mechanisms and investor roles matters as much as expanding funding. They said the habit of demanding short-term returns from companies that need years of technological development blocks capital from flowing into innovation.

Why do investors and companies need to share responsibility?

Park Hee-deok, CEO of Translink Investment, wants technology financing rebuilt from the ground up. "Technology financing must shift from loan-based evaluations of collateral and repayment capacity to risk-taking investments focused on future value," he said.

Park argued that venture capital firms should stop acting as mere fund providers. He wants them to become "execution partners" that help with talent recruitment, customer acquisition and global partnerships. He also wants liability spread across three parties. Founders handle execution. General partners manage investment decisions and value creation. Limited partners oversee fund selection and capital allocation. Today, joint guarantees concentrate liability on founders.

Park added a market signal: global VCs avoid Korea not because funds are too small, but because of contractual structures such as limited partnership agreements (LPAs) and fee systems.

Why does a 13-year road to IPO collide with a 7-year fund?

The numbers frame the problem. Korean companies take an average of 13 years from founding to IPO. Venture funds typically mature in 7 to 8 years. About 17 trillion won in venture funds will mature this year. That combination forces investors to recover their money before companies can finish developing technologies or enter markets.

Kim Hong-il, CEO of K Unicorn Investment, stressed the need for structures that allow long-term engagement. He laid out the arithmetic: a fund with an 8-year tenure leaves only 4 years for returns if it invests in year four, while a 12-year fund could wait 8 years.

Kim proposed a "third type of capital" that combines three elements:

• long-term public recovery funds;
• private investment terms with flexible risk-sharing;
• budgets for validating technologies in real-world settings.

He cited the U.S. nonprofit IQT and the U.K.'s National Security Strategic Investment Fund (NSSIF) as models that link government technology needs, institutional investment decisions and user performance testing.

Kim named three priorities. First, manage public recovery funds in separate long-term accounts. Second, certify technology investment funds, as France's Tibi system does, to attract institutional investors such as insurers. Third, combine public recovery funds with new corporate and financial contributions to create long-term capital.

What would "smart regulation" change?

Lee Yong-gwan, CEO of Bluepoint Partners, said current rules actively punish long-term investment. Accelerators that reinvest in portfolio companies can fail investment ratio requirements. Companies founded directly by investors face limits on additional investments because regulators classify them as affiliates. And pressure to divest within fixed periods hits even before commercialization.

Lee proposed replacing "positive regulation" — which lists permitted actions and exceptions — with "smart regulation." The approach keeps regulatory goals intact but tailors their scope, intensity, methods and timing to match risk levels and investment stages.

The co-lab's message to policymakers is concrete: the 150 trillion won fund succeeds only if fund tenures stretch, liability spreads beyond founders, and rules stop punishing reinvestment. Without those changes, the money will chase the same short-term returns that kept it away from deep tech in the first place.