National Assembly Discusses Preventing Promising Venture Drain, Boosting Investment Market

KOSDAQ Market Innovation Emerges as Key to Activating Venture Ecosystem On the 3rd, at the National Assembly Members' Office Building, the 'Innovation Forum for Activating the Venture and Startup Investment Market,' jointly hosted by the Korea Venture Business Association and the National Assembly Unicorn Farm, was successfully held. This forum was an important occasion to diagnose the limitations of the stagnant exit market and rigid listing system, and to discuss practical solutions for the growth of innovative companies. Members of the National Assembly who attended the forum consistently pointed out the problem of the stagnant exit market hindering the virtuous cycle of the domestic venture ecosystem, and emphasized the urgency of institutional improvements to balance investor protection and innovative growth, so that promising companies can grow domestically without relocating overseas. In particular, there was a strong call for creating an environment where startups with low access to the capital market can secure funding in a timely manner and re-challenge themselves. Professor Choi Young-geun of Sangmyung University, who presented as a speaker, suggested indirectly supporting a private-led exit market foundation and securing the independence of the KOSDAQ market and flexibility of the listing system. Researcher Lee Seok-hoon of the Korea Capital Market Institute added that technology-specialized listings, an important listing channel for ventures and startups, suffer from issues such as declining market trust and information asymmetry, and stated that institutional improvements are needed through expanding institutional investor-centric capital inflows, strengthening disclosure, and making delisting requirements more flexible. In the subsequent discussion, more specific demands for institutional improvements were presented. The necessity of ensuring clarity and consistency in listing review standards, and establishing an appeals process for evaluation results was emphasized, along with the importance of developing listing pathways that consider the characteristics and growth stages of technology companies, making the special listing system more flexible, and improving tax incentives to attract investors. Furthermore, institutional support such as flexible conversion requirements for preferred stocks and improved voluntary lock-up agreements were also called for, in order to secure a smooth exit market, which is central to the virtuous cycle of venture investment. Song Byung-joon, Chairman of the Korea Venture Business Association, concluded the forum by emphasizing that the KOSDAQ market has lost its original dynamism and transformed into a uniform and rigid system, and that these discussions for activating the exit market, which is key to the virtuous cycle of 'startup-growth-exit-reinvestment,' must lead to actual institutional improvements. This forum is expected to be a starting point for establishing an institutional foundation that will enable the KOSDAQ market to regain its original role as a gateway for innovative companies and drive the sustainable growth of the domestic venture ecosystem.