SEJONG, Jan. 17 (Korea Bizwire) — The government will launch a 2.6 trillion-won (US$2.45 billion) investment fund for startups this year, the first portion of a proposed 10 trillion-won investment fund that is to be created by 2020, the finance ministry said Wednesday.
Earlier, the government said it will allocate 30 trillion won over the next three years to foster innovative startups and venture firms, create a virtuous business cycle and secure a new growth engine.
The government will chip in 3.7 trillion won over the next three years, with the remaining 6.3 trillion won to be financed by the private sector.
Under the comprehensive plan, the government will focus on expanding the money supply for fledgling enterprises and creating a venture-friendly environment.
It will first create a 10 trillion-won fund in the coming three years to help innovative venture firms acquire necessary investment from the outset.
Funded by state policy lenders, such as the Korea Credit Guarantee Fund and the Korea Technology Finance Corp., a 20 trillion-won lending program will also be available for startups.
The government will also reduce taxes on profits gained from stock options in startups in order to attract talented people to the sector.
In order to help startups raise funds more easily via stock sales, the government will boost the second- and third-tier exchange markets, such as the tech-heavy KOSDAQ and KONEX.