1. A Legal Reformation of Venture Capital System
-Focused on the venture's funding in the Dae-Deok R&D Zone-
Venture industry of South Korea plays an important role in leading its cutting edge industry, passing the young age to enter the adol ...
1. A Legal Reformation of Venture Capital System
-Focused on the venture's funding in the Dae-Deok R&D Zone-
Venture industry of South Korea plays an important role in leading its cutting edge industry, passing the young age to enter the adolescent age. However, policies to support the venture industry and specifically venture capital service are not fully established and the atmosphere surrounding venture industry of South Korea is not advanced enough to supply the necessary funding to venture industry.
The study subject is Dae-Deok R&D Special Zone, which is a clustered area of technology oriented venture companies and also a symbolic area, as a test area that is supported by the government's special law. Therefore, if in this area, the settlement of spontaneous venture capitals succeed, this means that polices for venture industry will be changed into the advanced systems. This study suggests the following to activate venture funding of Dae-Deok R&D Special Zone.
First, to activate the atmosphere of venture funding of Dae-Deok R&D Special Zone, the legal system to make financing from private sectors easy must be established. Because of the lack of funding, most venture companies cannot realize their technologies to be commercialized., the structure of venture capital must be improved.
Second, since there are many new technology oriented venture companies in Dae-Deok R&D Special Zone, the systems for investment in the early stage and the consistent investment must be established. A system that workers can invest in their Limited Liability Company (LLC) or America's Limited Liability Partnerships must be considered to be introduced positively.
Third, rational taxation systems must be performed and a legal basis must be established to help generate venture capitals which are based on Dae-Deok R&D Special Zone and support the actual technology development. Because the existing double taxation cause the financial pressure to venture companies and venture capitals, taxation reform is needed to make pass-through taxation possible by introducing Limited Liability Company. Also, financial supports for the establishment of venture capitals based on Dae-deok area must be positively considered.
2. A Reform Proposal for the Revitalization of Funding in Knowledge-based Businesses
The purpose of this study is to make a reform proposal on the revitalization of funding in the knowledge-based businesses, especially regarding the venture companies. In the 21st century, our industrial paradigm is changing into that of knowledge-based industries which are based on invisible human assets, unlike traditional industries.
But many knowledge-based corporations have been placed in a difficult situation related to financing problems. It is because they cannot receive loans from banks as they can not have tangible assets such as real estate. For example, venture companies have plenty of intellectual property rights, but they will not acquire success in financing, because it is not easy to finance by using intellectual property rights security systems. Thus, we must take actions as follows for revitalization of funding in knowledge-based businesses.
First, collateral evaluation systems that evaluate the value of companies' security systems for intellectual property rights must be established in Korea. Second, the government must install an organization that will establish the valuate of companies' techniques. Third, we have to reform legal systems concerning intellectual property rights security systems so that banks will have faith that invisible assets are as important and safe as tangible capital assets in the future. Futhermore, we have three approaches(cot approach, market approach, income approach) in valuating intellectual property rights, but these methods cannot be suitable for valuating intellectual property right security systems.