Yoon admin to launch special startup-support track 

The incoming Yoon Suk-yeol administration will lend extra support to the startup ecosystem – biotech and artificial intelligence firms in particular. 

The presidential transition committee announced the plan during Tuesday’s press briefing. Ko San, one of the committee members working on the next administration’s economic plan, said the Tech Incubator Program for Startup Korea (TIPS) will be expanded. 

In addition to the biotech and AI firms, the transition committee said the government will also bolster the financial backing of early stage startups and female founders. The size of South Korea’s fund of funds will also increase.

The country’s startup ecosystem saw its heyday last year with unprecedented funding rounds. But unicorns, as private startups worth $1 billion or more are called, have been relying on overseas investment for their late-stage funding. 

Although Ko is better known as a former astronaut candidate, he is an entrepreneur himself. He co-founded ATEAM Ventures Co., an on-demand three-dimensional modeling service that uses 3D printers.

The Yoon administration is also bullish on training personnel in conjunction with the private sector. The government plans to work together with tech heavyweights such as NHN Corp. and Kakao Corp. to set up programs for training software engineers and data scientists. 

Korean tech companies have a growing demand for quality talent and many conglomerates have set up departments within leading universities to combat the personnel shortage.

The incoming administration will also allow startups to issue multiple voting shares; a regulatory change the industry had been fighting for. 

Multiple voting shares mean that existing shareholders can strengthen their control over the company. In other words, they have more votes than warranted by the amount of capital represented by their number of shares. 

Startup founders have called for such protection to prevent hostile takeovers when their companies go public, which could dilute their stakes in them. 

When the Moon Jae-in administration attempted to allow such a practice, it faced strong opposition from the liberal party. The Democratic Party of Korea argues that multiple voting rights infringe on the stockholder equality principle and could be used for illegally passing down managerial rights in startups.

The incoming administration will also cut taxes on stock option payments for startup employees. Currently, startup employees do not have to pay taxes on stock options up to 50 million won in value. 

“We aspire to build a complete startup ecosystem, from the planning stages forward, to help companies become unicorns,” Ko said.

Write to Eun-Yi Ko at koko@hankyung.com
Jee Abbey Lee edited this article.