BIK Ventures is an IT venture company, and is currently developing an application named “Timepie” that facilitates personal schedule management.
Kang is one of 3,643 young entrepreneurs who started their own business in 2015. According to Small and Medium Business Administration, newly established corporations in 2015 are estimated to be over 90 thousand. Analyzed by ages of CEOs, founders aged below 30 accounted for the largest portion. Until last September, 3,643 young entrepreneurs under 30 years old started their business this year.
As can be seen from this statistics, a wave of start-ups is currently flourishing in Korea. Soon after her inauguration, the Park Geun-hye administration launched a plan for financial and structural support for start-ups. The establishment of young ventures were encouraged for the purpose of alleviating heavy reliance on huge chaebols and creating an atmosphere for innovative entrepreneurship among young job seekers. The Ministry of Science, ICT and Future Planning (MSIP) launched in 2013 for the realization of the “creative economy,” allocated over two billion dollars to foster the start-up ecosystem. Joint efforts between the government and private sectors served as other strategic means, leading to the implementation of start-up accelerators and incubators including K-startup and Startup Alliance Korea.
However, there are still various obstacles start-up founders face at the phases of starting and running the business. One of the problems they point out is inflexible government policies in giving financial support. Novice entrepreneurs are having difficulties in preparing funds and getting government subsidies for several reasons.
“Many start-ups hesitate in getting governmental support,” said Jang Han, a representative of Seoul National University Student Venture Network. “I heard from a start-up CEO that one has to submit receipts down to a single penny to prove the proper usage of the subsidy to the concerned administration. Such strict regulations by the government is understandable for ensuring transparency, but the administration should consider inflexibility of the process.”
Moreover, despite the increased investment opportunities compared to the past, an intense competition for attracting investors still exists.
“The so-called ‘Serial Entrepreneur’ who has previously succeeded in product launching may have more opportunities for sourcing investment.” Kang, CEO of BIK Ventures, mentioned. “However, new corporation made up of students without a firm understanding of the business and track record goes through a hard time in persuading investors.”
Kang Keun-cheol, CEO of SEA(Story, Education, Advice), a start-up specializing in consulting and designing lectures, pointed out several problems based on his experience of consulting many young entrepreneurs.
“The problem lies in the fact that government subsidy is in a form of the loan with principal payment due in usually three years,” Kang said. “By then, business may be undergoing completion of items and services or have just entered the market. Also, the monthly interest payments equal the wage of one to two workers, which are overwhelming for young entrepreneurs.”
Facing the concerns that packages of government support are not effective in reality, on Oct.14, MSIP announced a plan to integrate its administrative process in order to make the fund more readily available for start-ups in need. By incorporating the 99 start-up-related policies, the government seeks to eliminate dissemination of information and registration processes for receiving support.
Young entrepreneurs voice out that the social ambience oriented toward the “start-up boom” should not remain as a slogan of a government nor a temporary trend of the market.
“For sustainable growth of start-ups, the government should be able to give professional advice with qualified and specified consultants,” Kang added. “The government should notice that young CEOs lack professional skills and experience but possess innovative potential.”