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  • Posts Tagged ‘M&A’

    Korea’s Missing Ingredient

    August 24th, 2012  by  Asia-Pacific Global Research Group - Jasper Kim

    Below is my latest Wall Street Journal (WSJ) op-ed piece, “Korea’s Missing Ingredient”

     

    Highlights:

     

    • This article asks the question: what challenges face Korean venture capital (VC) firms?

     

    • Korea’s economy is heavily dependent on large conglomerates. And exports make up nearly half (48%) of its GDP. Just think of how much more vibrant Korea’s economy could be if VCs were afforded greater economic freedom to invest in “the next big thing.”

     

    • Korea’s state-sponsored “hardware”–technoparks, incubators, business parks–are fine,but not optimal (those receiving such public funding may, as a result, have a financial self-interested incentive to disagree with this view).

     

    • The corporate laws should be reformed such that VCs can be formed as not only as corporates (albeit stock or LLC, the latter being a more flexible form of a corporation, but still by definition, a corporation by law), but as also as partnerships (as in Silicon Valley, Route 128)

     

    • Policy prescriptions include amending Korea’s commercial code to allow VCs to form as partnerships, so that greater interaction and a longer term focus can be formed between the VC investors and the invested businesses (and their founders).

     


    Korea’s Missing Ingredient

    Venture-capital funds have been the special sauce for high-tech booms elsewhere. Seoul should get out of the way of a similar boom.

    The U.S. has Mark Zuckerberg of Facebook. Japan has Masayoshi Son of Softbank. China has Jack Ma of Alibaba. South Korea has . . . who, exactly?

    That question grows more and more urgent as Korea tries to shift economic gears from manufacturing powerhouse to global innovator. The Zuckerbergs, Sons and Mas of the world show that fostering creativity requires creative geniuses. But those stories also highlight the need for creative financing—and especially venture capital.

    In its early years, Facebook received substantial funding from venture funds Accel Partners and Greylock Partners. Long-established firms such as Cisco, Federal Express, Intel and …

     

    [remaining article available at wsj.com]