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

第 25 期Source : Korea Venture Capital AssociationDiagram 1 Trend of VC Investment by YearSome may still argue that KOTEC provides financing more easily and swiftly than VCsto promising start-ups through standardized technology appraisal process, often by bundlingVenture certification or InnoBiz certification. 4For them, KOTEC’s robust operation may beinterpreted as snatching VCs’ investment candidates.Please note that I do not intend to illustrate the pitfalls of fund of funds scheme. In fact,the early-stage funding practice has increased from 26.9% in 2006, to 40.8% in 2008, and to43.0% in 2012 by the number of funding practices. This is surely a meaningful increase,largely thanks to such new schemes.However, most of the early-stage investments were made with “redeemable preferred4 Ventures that belong to certain designated category of New Economy are certified as “Venture,” andinnovative SMEs with visible competitiveness is certified as “Inno-biz” by the government to give specialincentives such as tax benefit, and KOTEC does most evaluations for the certification.146