Korean VCs Can Take Majority Stakes In Startups

from the what-a-strange-law dept

Every time you hear stories about various places around the world trying to become “the Silicon Valley of wherever,” one of the biggest elements they’re usually missing is a functioning venture capital industry to fuel the fire of the startup engine. There are a variety of reasons why this usually is more difficult to create than it would seem — but silly legal restrictions seem like the type of thing that should be the first to go. Apparently South Korea, no slouch to technology innovation, has had restrictions in place that banned VCs from owning more than 50% of any startup. That, not surprisingly, caused lots of trouble for startups that needed more cash, but couldn’t justify a valuation that would keep VC investors under the 50% mark. However, politicians have finally realized how pointless this law was and ditched it. That doesn’t necessarily mean VC money will thrive there, but it can’t hurt.

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Comments on “Korean VCs Can Take Majority Stakes In Startups”

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dorpus says:

Gang City

In case you think I’m making a crazy off-topic post, we have the case of Masayoshi Sun, a Korean-Japanese who started Softbank with mob money. It was mostly a scam that defrauded investors with promises of becoming some sort of Japanese Microsoft. The guy is still around doing business, because gangsters are never arrested for white collar crime in that part of the world. It would not surprise me if Masayoshi Son himself was involved in deregulating Korea’s VC laws, so he could get involved.

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