Is Equity-Financing Always Optimal for Innovative SMEs? --How ...

第 25 期expenditure through direct financing; issuing of bonds, 18stocks, etc. However, the optionsare not available for SMEs. CGS not only makes possible for SMEs to issue bonds by creditenhancement, but also in effect serves as indirect financing, which is mainly for financingshort-term need of working capital, to stay long with companies through rollovers.It is clear now why EU has employed CGS as main vehicle in the Horizon 2020 in thistroubled situation of global financial crisis.III. Things That We Need to Know before Benchmarking ElsewhereIn Silicon Valley which is Mecca to ambitious ventures, getting equity funding fromVCs or angels instead of getting bank loan to realize their innovative ideas is the norm. Asexplained in the previous chapter, it has distinct excellence.The second most referred example for benchmarking next to Silicon Valley innowadays market-friendly trend of policymaking in Korea comes from Israel. The country istruly worth examining. In fact, a newspaper recently mentioned Israel’s YOZMA Fund 19asthe ideal subject for benchmarking for new SME policy. The article also quoted that thescheme would significantly help the problem of “Youth Unemployment.”According to the book, Start-up Nation, 20 Israel’s per capita VC investment is 2.518 Currently there are only about 200 companies eligible to issue straight bond without credit enhancement inKorea where primary bond market is well developed compared to other nations in ex-Japan Asia19 YOZMA means “initiative” in Hebrew. The scheme was started by Yigal Erlich, the chief scientist under theMinistry of Trade and Industry, came up with the idea of establishing a $100M public fund of funds toinvest in private VC funds in 1993. From the initial stage of operation, Yozma brought 10 private VC fundsto Israel to ensure local skill building and collective learning for VC industry. For more detail, please see“Policy and VC: The Case of Israel, Jenny Stefanotti, April 20, 2012, Developing Jen.” Its unique feature ofsharing risks between government and VCs is indeed worth looking at.20 Start-up Nation: The Story of Israel’s Economic Miracle, 2010, Dan Senor and Saul Singer, A Council onForeign Relations Book160