Venture Enterprise Glossary
Key terms related to Korea's venture enterprise system, explained clearly.
Accelerator (AC)
Accelerator (AC)
Organizations providing investment, mentoring, education, and networking to early-stage startups, r…
Acquisition Tax Reduction
Acquisition Tax Reduction
75% reduction in acquisition tax when venture enterprises acquire real estate for direct use.
Act on Promotion of Venture Investment
Act on Promotion of Venture Investment
Law enacted in 2020 dedicated to venture investment. Regulates venture investment unions, angel fun…
Act on Support for SME Startups
Act on Support for SME Startups
Law to promote and support SME startups. Regulates startup funding, tax benefits, and business incu…
Angel Investment
Angel Investment
Direct investment by individual investors (angel investors) in early-stage venture enterprises, eli…
Angel Investment Fund
Angel Investment Fund
A fund formed by individual investors for joint investment in venture enterprises, with income dedu…
Business Valuation
Business Valuation
The process of determining the economic value of a business in monetary terms using methods like DC…
Capital Gains Tax Exemption
Capital Gains Tax Exemption
Exemption from capital gains tax when selling venture enterprise shares held for 3+ years.
Corporate Tax Reduction
Corporate Tax Reduction
Venture-certified enterprises receive a 50% reduction in corporate (or income) tax for 5 years from…
Credit Guarantee
Credit Guarantee
System where KODIT guarantees enterprise credit to support bank loans.
Dilution
Dilution
The reduction of existing shareholders' ownership percentage due to new share issuance.
Exit
Exit
The process by which investors recover their investment through IPO, M&A, or secondary sale.
Fund of Funds (FoF)
Fund of Funds (FoF)
Government fund-of-funds operated by KVIC. Invests in individual VC funds as a parent fund.
General Partner / Limited Partner
General Partner / Limited Partner
GP (General Partner) manages the fund; LP (Limited Partner) provides capital as an investor.
Government Policy Fund
Government Policy Fund
Low-interest policy loans provided by MSS, SBC, and other government agencies.
Income Tax Deduction
Income Tax Deduction
Tax deduction system for venture enterprise investment: 100% for up to 30M KRW, 70% for 30-50M KRW,…
Innobiz
Innobiz
Technology innovation SME certification. Separate from venture certification but similar in evaluat…
Innovative Growth Type
Innovative Growth Type
Certification type for enterprises with excellent technological innovation capabilities, evaluated …
Internal Rate of Return
Internal Rate of Return
The discount rate that makes the NPV of an investment zero. A key metric for measuring venture inve…
Investment Confirmation Certificate
Investment Confirmation Certificate
Document confirming investment in a venture enterprise. Required for income deduction applications.
Korea Business Angel Network
Korea Business Angel Network
Organization issuing angel investment income deduction confirmations. Handles angel fund registrati…
Korea Technology Finance Corporation (KIBO)
Korea Technology Finance Corporation (KIBO)
Public institution providing technology guarantees and assessments to technology-based SMEs and ven…
Korea Venture Business Association (KOVA)
Korea Venture Business Association (KOVA)
Association for protecting venture enterprise interests and developing the venture ecosystem.
Korea Venture Capital Association (KVCA)
Korea Venture Capital Association (KVCA)
Association for self-regulation and development of the venture capital industry in Korea.
Korea Venture Investment Corp. (KVIC)
Korea Venture Investment Corp. (KVIC)
Government fund-of-funds operator. A key capital source for the venture investment ecosystem.
Mainbiz
Mainbiz
Management innovation SME certification. Granted to SMEs creating results through management innova…
Military Service Exception
Military Service Exception
System allowing core R&D personnel at venture-certified enterprises to work at the company instead …
Ministry of SMEs and Startups (MSS)
Ministry of SMEs and Startups (MSS)
Central government agency overseeing SME and venture enterprise policy in Korea.
Multiple on Invested Capital
Multiple on Invested Capital
The ratio of total return to invested capital. MOIC = Total return / Invested capital. E.g., 2x MOI…
New Share Issuance
New Share Issuance
The issuance of new shares by a company to increase capital. A key instrument for paid-in capital i…
Post-money Valuation
Post-money Valuation
The valuation of a company after new investment. Pre-money + Investment amount = Post-money.
Pre-money Valuation
Pre-money Valuation
The valuation of a company before new investment. Represents the company's value prior to the inves…
Pre-Venture Enterprise
Pre-Venture Enterprise
A system where enterprises before or within 3 years of business start can receive preliminary ventu…
Professional Angel Investor
Professional Angel Investor
Individual investor registered with KBAN with venture investment track record, potentially eligible…
Property Tax Reduction
Property Tax Reduction
Property tax reduction for venture enterprises located in venture cluster facilities.
R&D Type
R&D Type
Certification type for enterprises with in-house R&D centers spending 5-10%+ of revenue on R&D, eva…
Separate Taxation
Separate Taxation
Taxation method that separates income from aggregate taxation. Stock option exercise gains can be s…
Special Act on Fostering Venture Enterprises
Special Act on Fostering Venture Enterprises
Special act to promote creation and growth of venture enterprises. Legal basis for certification, b…
Special Tax Treatment Control Law (STTCL)
Special Tax Treatment Control Law (STTCL)
Abbreviation for the Special Tax Treatment Control Law. The legal basis for venture tax benefits (A…
Stock Option
Stock Option
Stock purchase rights granted to venture enterprise employees. Up to 200M KRW/year in exercise gain…
Tax Exemption
Tax Exemption
Tax not being imposed. Includes stock option exercise gains up to 200M KRW/year and venture investm…
Technology Guarantee
Technology Guarantee
Guarantees provided by KIBO based on technology assessment, supporting financing for enterprises la…
Venture Capital (VC)
Venture Capital (VC)
Investment firms providing capital and management support to high-risk, high-return venture enterpr…
Venture Confirmation Agency
Venture Confirmation Agency
Agencies performing venture certification: KIBO (Korea Technology Finance Corporation), SBC (Small …
Venture Confirmation Certificate
Venture Confirmation Certificate
Official document proving venture enterprise certification. Valid for 3 years, renewable before exp…
Venture Confirmation System
Venture Confirmation System
Online venture enterprise confirmation application and management system operated by MSS (smes.go.k…
Venture Enterprise
Venture Enterprise
An enterprise certified under the Special Act on Fostering Venture Enterprises, recognized for its …
Venture Enterprise Cluster Facility
Venture Enterprise Cluster Facility
Facilities designated for venture enterprise tenancy with acquisition tax and property tax reductio…
Venture Enterprise Promotion District
Venture Enterprise Promotion District
Special districts designated for venture enterprise clustering, providing tax reductions and rental…
Venture Investment Type
Venture Investment Type
Certification type for enterprises that have received investment of 10% or more of capital from VCs…