In the future, the ratio of investment obligations (20%) for start-ups and venture companies of individual investment associations that invest in early start-ups will be abolished. The target of fund investment obligations, which were limited to companies with three years of business experience, will also be extended to start-up companies with five years of business.

The Ministry of SMEs and Startups announced on the 23rd that the revised Enforcement Act on Promotion of Venture Investment and the Enforcement Decree of the Special Act on Promotion of Venture Business, which improves the venture investment system as a follow-up to the "Comprehensive Measures for Leaping the Four Venture Powers" announced last year, passed a Cabinet meeting.

In this enforcement decree, the obligation to invest in start-ups and venture companies, which was applied to individual investment associations operated by start-up planners, was removed. Previously, 20% of the regulations had to be set for each fund, but in the future, 40% of the investment will be applied based on the total amount of funds held by the management company, enabling flexible management of each fund.

The industry has pointed out that applying the standards for each fund has difficulties such as having to make investments to companies with low potential to meet the ratio.

The investment obligations will also increase. Previously, the fund could only invest in companies within their third year of business, but in the future, if there is no record of attracting investment, it can also invest in start-up companies with five years of business.

The Ministry of SMEs and Startups explained, "It has eased the financing burden of promising companies with technology." The amendment also raised the upper limit of the proportion of individual investment associations when investing in listed corporations from 10% to 20%.

If venture capital (CVC) and investee companies belonging to large corporate groups belong to the same large corporate group after death, a grace period for disposal of the investee's stake will also be granted for nine months. It is a measure to improve the conditions for CVC's return on investment.

[Reporter Lee Yoojin]