Blog

DEEP RESEARCH · VENTURE POLICY

Venture-Investment Policy: Design and Risks of the KRW 150 Trillion National Growth Fund

A policy review linking public capital, private LPs, CVC deregulation, exits, and regional venture ecosystems

Date: 2025-09-13 · asset-allocation/policy-analysis view · Naver Blog

Investment decisions are your own responsibility. This material is research, not a recommendation to buy or sell.

0. Bottom line first

The core of the policy package is an attempt to shift capital allocation toward productive finance. The KRW 150 trillion National Growth Fund has scale and vision, but also risks of government-directed capital, market distortion, and complex execution.

Venture policy packageCapital supply is tied to talent, exits, and regional ecosystems
Public capitalKRW 150tn National Growth Fund
Private capitalCVC easing, fund-of-funds, tax incentives
EcosystemStock options, talent, regional infrastructure
Exit marketM&A, secondary funds, IPO reform
The policy works best if government acts as a catalyst rather than a commander

1. Main policy pillars

PillarCore policyGoalMechanism
Large public capitalKRW 150tn National Growth FundLong-term capital to strategic industries and venturesPublic-private matching funds, equity investment, low-interest loans
Private capitalCVC deregulation, fund-of-funds expansion, 2025 tax reformAttract corporate, institutional, and individual capitalEased rules, public fund-of-funds, LP tax benefits
Ecosystem and talentExpanded stock-option tax benefitsAttract and retain talentAnnual tax-exempt stock-option exercise gain limit of KRW 200mn
Exit marketM&A, secondary funds, IPO reformPractical exits for founders and investorsM&A tax benefits, secondary-fund capital, IPO rationalization
Regional growthRegional venture funds and infrastructureBuild ecosystems outside SeoulRegional funds, startup parks, R&D hubs

2. National Growth Fund structure

Official fact: The source presents the fund size as more than KRW 150 trillion, combining KRW 75 trillion of public/policy capital and KRW 75 trillion of private/market capital, with KRW 1 trillion first reflected in the 2026 budget.

ComponentDetail
Total sizeMore than KRW 150 trillion
Funding sourcesKRW 75tn public/policy capital and KRW 75tn private/market capital
Government roleInduce private participation through risk sharing, including subordinated investment
GovernanceEconomic ministers' meeting, operating committee, vice-ministerial interagency council
TargetsAI, semiconductors, biotech, venture ecosystem, regional growth, infrastructure such as data centers
InstrumentsDirect equity, fund-of-funds, infrastructure investment/loans, ultra-low-interest loans

3. CVC regulation and private capital

AreaPrevious ruleNew ruleExpected effect
External LP fundingUp to 40% of CVC fundRaised to 50%Larger funds and more institutional participation
Overseas investmentUp to 20% of total assetsRaised to 30%More global strategic investment
Overseas subsidiariesUsually counted as overseas investmentMay be treated as domestic if owned by Korean startupsEases global expansion constraints
OwnershipHolding company must own 100% of CVC subsidiaryMaintainedPrevents control expansion using outside capital
Prohibited investmentNo investment in controlling-family owned or controlled companiesMaintainedReduces conflict and tunneling risk

4. International models and SWOT

ModelGovernment roleMechanismImplication for Korea
Israel YozmaEarly catalyst and risk absorberForeign VC partnerships and government stake buyout optionPrivate-led management and incentive alignment matter
France BpifranceIntegrated public investment bankLifecycle supportNeed for a durable institution beyond political cycles
U.S. SBIRFirst customer and R&D funderFederal R&D budget grants for small firmsGovernment demand can validate deep tech without direct equity
Strengths

Strengths

KRW 150tn scale, broad design across capital/talent/exits/regions, strong political will.

Weaknesses

Weaknesses

Government-directed capital, valuation inflation, crowding out private VCs, execution complexity.

Opportunities

Opportunities

Strategic-industry leadership, exit bottleneck relief, attraction of global VCs and talent.

Threats

Threats

Global recession, U.S.-China tech conflict and tariffs, CVC abuse, fiscal burden.

5. My view

Interpretation: The direction is supportive for the venture ecosystem. But scale alone does not guarantee results. Independence of private managers, exit-market improvement, regional-fund quality, and loss discipline will decide the outcome.

Sources

Naver original