Expansion of Individual Investment Association Mandate to Startups Within Five Years of Establishment

Enforcement Decrees of the Venture Investment Promotion Act and Venture Business Promotion Act Passed by the Cabinet

The regulations governing private investment associations managed by accelerators (startup planners) will be revised to enhance the autonomy of venture investments, including expanding the mandatory investment target from startups within three years of establishment to those up to five years old.

The Ministry of SMEs and Startups announced that amendments to the Enforcement Decree of the Act on Special Measures for the Promotion of Venture Investment and the Enforcement Decree of the Special Act on Fostering Venture Businesses, aimed at following up on last year's "Comprehensive Plan for Becoming a Top 4 Global Venture Powerhouse" and improving the venture investment system, were passed at the Cabinet meeting on June 23, 2026. The revised Enforcement Decree will take effect from July 1, following its promulgation.

Hansung Sook, Minister of SMEs and Startups, is responding to President Jae Myung Lee's question at the Cabinet meeting combined with the Emergency Economic Inspection Meeting held at the Blue House on the 23rd. Photo by Yonhap News

The mandatory investment target for private investment associations operated by startup planners will be expanded from companies within three years of establishment to startups up to five years old that have not yet attracted investment. With this expanded scope, promising companies with technological capabilities will have smoother access to capital, and greater autonomy will be granted in investment management. In addition, the cap on investments in listed companies by private investment associations will be raised from 10% to 20%.

If a corporate venture capital firm affiliated with a conglomerate and an invested company subsequently become part of the same conglomerate group, a nine-month grace period will be granted for the disposal of shares in the invested company, thereby improving conditions for investment recovery.

To promote fintech investment, the scope of fintech-based financial services that venture investment companies and others can exceptionally acquire will be changed from the previous "industry" standard to a criterion based on "licenses or registrations."

The rule requiring individual venture investment associations to invest 20% in startups and venture companies will also be abolished. Only the overall fund total held by an asset management company (40%) will apply, allowing for more flexible strategies tailored to each fund’s operational characteristics.

The operational regulations for the Korea Fund of Funds and the management system for venture investments will also be improved. When extending the duration of the Korea Fund of Funds, a new provision will allow for the distribution and payment of the principal and returns to union members wishing to withdraw, thereby enhancing the credibility and transparency of the Korea Fund of Funds' operations.

In response to the rapidly increasing demand for inspections of venture investment companies and associations, from January 2027, the tasks of dissolution, liquidation, and regular inspections will be handled by local offices of the Ministry of SMEs and Startups. In addition, the responsibility for compiling statistics on startup planners will be transferred from the Korea Institute of Startup & Entrepreneurship Development to the Korea Early Stage Accelerator Association, strengthening the professionalism of statistics on early-stage startup investments.

A "Venture Business Week" will also be designated to widely publicize the achievements of the venture ecosystem. By amending the Enforcement Decree of the Special Act on Fostering Venture Businesses, the first week of December every year will be designated as Venture Business Week. Through the recognition and promotion of outstanding venture companies, this aims to encourage venture entrepreneurs and provide an opportunity to highlight the achievements of the venture sector.

Minister Han Seong-sook of the Ministry of SMEs and Startups stated, "This revision of the Enforcement Decree is the result of regulatory improvements to enable the venture investment market to operate more autonomously and flexibly. We will continue our efforts to ensure that the revised system takes root in the investment field and that private capital actively flows into ventures and startups."

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