On January 11, 2024, OH Youngju, Minister of Small and Medium Enterprises and Startups of South Korea, announced that he would begin negotiations with private investors to jointly fund the establishment of the "Startup Korea Fund".

The Korean Startup Fund is a fund jointly funded by a Korean fund and several private entities. The fund's main goal is to create a private sector-focused venture capital ecosystem, which is also the core philosophy of Startup Korea.

The fund has set a goal of raising 2 trillion won ($1.53 billion) over four years from 2024 to 2027. In 2024, the fund aims to raise more than KRW 500 billion (USD 375 million) by investing KRW 150 billion (USD 113 million) through funds of funds. Following the announcement of the "Korea Startup Comprehensive Policy" on August 30, 2023, the government has been soliciting feedback from various industry stakeholders, including private investors, venture capitalists, and startups.

South Korea’s Ministry of Venture Capital has developed specific incentives and investment opportunities to encourage private investors to participate. By implementing a fund-of-funds and private sector co-investment structure, the investment ratio of funds-of-funds can be reduced from about 50% to about 30%. This approach will also create strong incentives, including priority loss grants, 

which will encourage the private sector to participate more actively in venture capital. These incentives and investment opportunities are designed to break down traditional investment barriers and promote the participation of private investors in entrepreneurial projects. By reducing the investment ratio, providing incentives and priority loss allocations, South Korea's Ministry of Venture Capital hopes to attract more private capital to flow into the entrepreneurial field and promote the development of innovation and entrepreneurship.

The Ministry of Venture Capital of South Korea encourages private investors to participate in venture capital investment by formulating specific incentives and investment opportunities, thereby promoting the development of innovation and entrepreneurship. These measures help build an entrepreneurial-friendly ecosystem that promotes economic growth and job creation.

The Ministry of Small and Medium Enterprises and Start-ups has confirmed the signing of agreements between companies and financial institutions investing in the fund, and will soon issue a joint announcement with private investors to select venture investors.

LEE Eun-cheong, director of the Risk Policy Department of the Ministry of Social Security of South Korea, said: "The Korean Startup Fund will receive funds from funds and the private sector. This joint funding is aimed at maximizing the impact of the fund." He added: "This initiative is expected to provide The public and private sectors provide opportunities to collaborate and bring change to the venture capital investment market.