Gov't to ease rules for private funds to invest more in startups

SEOUL, Sept. 4 (Yonhap) -- The government plans to soften the rules to allow private venture capitalists to invest more in promising startups, the head of the financial regulator said Tuesday.

To help startups raise more funds from the private sector, Financial Services Commission (FSC) Chairman Choi Jong-ku said the FSC would increase the investment cap by crowdfunding sites for startups.

Choi told a seminar that private funds accounted for 46 percent of total financing for startups in South Korea last year, compared with 88 percent in the United States and 79 percent in the European Union.

South Korea's startups have mostly relied on state-backed funds, but such funds have an aversion to risky investments, Choi said.

This risk-averse culture has hindered entrepreneurship among promising startups, he said.

Choi added that the government will also revise the relevant regulations so that non-listed firms can easily raise funds.

Earlier this week, the government launched a 3 trillion-won (US$2.7 billion) fund to invest in promising startups as it seeks to promote innovation-led economic growth.

Seoul has focused on expanding the money supply for fledgling enterprises and creating a venture-friendly environment.

It said 300,000 jobs will be created by 2022 under the support measures for innovative startups.

kdh@yna.co.kr
(END)