Annual Angel Investment to exceed KRW 200 billion…Venture investment to gain ‘one axis’
Lee Joon Gee | bongchu@ | 2017-08-03 09:39:47
Last year`s investment in angel exceeded KRW 200 billion for the first time as the government`s policy to stimulate venture investment has been effective, such as an increase in income tax deduction for angel investment. In particular, it is analyzed that angel investment has become an axis of venture investment as individual direct investment and personal investment association formation increase every year.
According to the `Investment Status of Angel Investment in 2016` announced by the Ministry of Small Business and Venture Business on August 2, the investment amount of angel invested totaled KRW 212.6 billion, including KRW 174.7 billion in individual direct investment and KRW 37.9 billion in new investment. This is the largest in terms of both the number of investors and the investment since 2004, when the venture boom cooled and the investment plummeted.
The size of the angel investment through personal direct investment last year was 3984 people, KRW 174.7 billion won (based on income deduction), showing a remarkable increase since 2010. The average annual growth rate in the last three years (2014-2016) reached 41.2%. Considering that the application for income tax deduction for investment results last year is possible by 2019, direct private investment is expected to increase further.
The size of individual investment unions is also steadily increasing. This is because investors can invest more in terms of investment expertise, economies of scale, investment risk mitigation, and portfolio composition rather than direct investment. Individual investment unions started to grow from 2013, with the number of associations reaching 89 in 2015, the sum of KRW 44.6 billion, and the number of unions in 2016 reached KRW 211.3 billion. When we compare 2015 and 2016, combination number increased 206.7%, and the amount of formation increased 209.0%. As of June this year, the number of unions has increased to 273, amounting to KRW 137.8 billion.
Angel investment was focused in the start-up companies within three years. Last year, the number of angel invested in these companies amounted to 2277 (49.1%) and KRW 65.16 billion (37.3%), up 178.0% and 30.4% respectively. Besides, the number of small investors under KRW 15 million rapidly increased, and many investors tended to invest in a small amount.
The increase in angel investment is attributed to the Korean government`s efforts to revitalize venture capital investment, including the expansion of income deduction and the formation of an angel investment matching fund. In fact, the angel investment performance has increased every time the income deduction has been extended, and the amount of the `Angel Investment Matching Fund`, which matches the mother funds to the angel investment, is also increasing. This will ultimately lead to `Angel Investment → Angel Matching Investment → Venture Capital Subsequent Investment`, which is expected to lead to the establishment of a virtuous cycle structure of venture start-up investment market.
Kim Joo-hwa, head of investment recovery management, stated, "In the future, we plan to expand policy incentives such as income deduction and angel investment matching fund so that more people can participate in the angel investment market.”
Daejeon=By Lee Joon Gee bongchu@
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According to the `Investment Status of Angel Investment in 2016` announced by the Ministry of Small Business and Venture Business on August 2, the investment amount of angel invested totaled KRW 212.6 billion, including KRW 174.7 billion in individual direct investment and KRW 37.9 billion in new investment. This is the largest in terms of both the number of investors and the investment since 2004, when the venture boom cooled and the investment plummeted.
The size of the angel investment through personal direct investment last year was 3984 people, KRW 174.7 billion won (based on income deduction), showing a remarkable increase since 2010. The average annual growth rate in the last three years (2014-2016) reached 41.2%. Considering that the application for income tax deduction for investment results last year is possible by 2019, direct private investment is expected to increase further.
The size of individual investment unions is also steadily increasing. This is because investors can invest more in terms of investment expertise, economies of scale, investment risk mitigation, and portfolio composition rather than direct investment. Individual investment unions started to grow from 2013, with the number of associations reaching 89 in 2015, the sum of KRW 44.6 billion, and the number of unions in 2016 reached KRW 211.3 billion. When we compare 2015 and 2016, combination number increased 206.7%, and the amount of formation increased 209.0%. As of June this year, the number of unions has increased to 273, amounting to KRW 137.8 billion.
Angel investment was focused in the start-up companies within three years. Last year, the number of angel invested in these companies amounted to 2277 (49.1%) and KRW 65.16 billion (37.3%), up 178.0% and 30.4% respectively. Besides, the number of small investors under KRW 15 million rapidly increased, and many investors tended to invest in a small amount.
The increase in angel investment is attributed to the Korean government`s efforts to revitalize venture capital investment, including the expansion of income deduction and the formation of an angel investment matching fund. In fact, the angel investment performance has increased every time the income deduction has been extended, and the amount of the `Angel Investment Matching Fund`, which matches the mother funds to the angel investment, is also increasing. This will ultimately lead to `Angel Investment → Angel Matching Investment → Venture Capital Subsequent Investment`, which is expected to lead to the establishment of a virtuous cycle structure of venture start-up investment market.
Kim Joo-hwa, head of investment recovery management, stated, "In the future, we plan to expand policy incentives such as income deduction and angel investment matching fund so that more people can participate in the angel investment market.”
Daejeon=By Lee Joon Gee bongchu@