Key Takeaways
- • Kim Hak-kyun, president of the Korea Venture Capital Association, called for structural reform of the KOSDAQ market to attract institutional investors and sustain Korea's innovation ecosystem, citing the market's current 95% reliance on individual investor transactions as a critical weakness.
- • The venture industry leadership emphasized that KOSDAQ-listed corporations require a post-listing institutional investment framework to achieve long-term growth and transition into global enterprises, drawing parallels to the U.S. Nasdaq model exemplified by Tesla.
- • Venture capital funds operate on large institutional capital bases (pension funds, public funds), yet the KOSDAQ market structure remains heavily dependent on individual liquidity, creating a structural mismatch that impedes innovative company development.
- • Kim argued for converting KOSDAQ into a U.S. Nasdaq-style ecosystem where listed corporations meeting certain criteria benefit from sustained institutional investor capital flow to enable global scaling.
Summary
South Korea's venture capital leadership is pressing for fundamental market restructuring to address the KOSDAQ's institutional investment deficit. Kim Hak-kyun, president of the Korea Venture Capital Association, raised alarm about the market's structural constraints at the 2026 innovation venture industry gathering on January 22, stating that while the KOSPI's breakthrough past the 5,000 mark warranted celebration, the KOSDAQ presented a contrasting and disappointing picture.
The core issue centers on market composition: approximately 95% of KOSDAQ transactions currently derive from individual investors, creating a fundamental mismatch with the capital structures that venture funds require to operate. The venture capital industry depends on large institutional pools—pension funds and public funds—yet the KOSDAQ's market infrastructure remains architected around individual liquidity flows. This structural imbalance directly constrains the ability of innovative corporations to achieve sustainable long-term growth post-listing.
Kim's proposed solution involves fundamentally remodeling the KOSDAQ along U.S. Nasdaq lines. The strategy would establish selective listing criteria for corporations, followed by systematic channeling of institutional investor capital to enable those enterprises to scale into global competitors. This virtuous-cycle ecosystem approach contrasts with the current framework and mirrors successful U.S. market structures. Tesla was cited as the exemplar—a company that leveraged continuous institutional capital access after its initial public offering to achieve transformative growth and market dominance.
The venture sector's position reflects broader concerns about Korea's innovation pipeline sustainability. Without institutional depth supporting KOSDAQ-listed companies through growth phases, the market risks losing promising startups to international listings or capital reallocation. Institutional investment infrastructure thus becomes critical to maintaining Korea's competitive advantage in innovation-driven sectors and preventing brain drain of capital and talent to foreign markets.
The core issue centers on market composition: approximately 95% of KOSDAQ transactions currently derive from individual investors, creating a fundamental mismatch with the capital structures that venture funds require to operate. The venture capital industry depends on large institutional pools—pension funds and public funds—yet the KOSDAQ's market infrastructure remains architected around individual liquidity flows. This structural imbalance directly constrains the ability of innovative corporations to achieve sustainable long-term growth post-listing.
Kim's proposed solution involves fundamentally remodeling the KOSDAQ along U.S. Nasdaq lines. The strategy would establish selective listing criteria for corporations, followed by systematic channeling of institutional investor capital to enable those enterprises to scale into global competitors. This virtuous-cycle ecosystem approach contrasts with the current framework and mirrors successful U.S. market structures. Tesla was cited as the exemplar—a company that leveraged continuous institutional capital access after its initial public offering to achieve transformative growth and market dominance.
The venture sector's position reflects broader concerns about Korea's innovation pipeline sustainability. Without institutional depth supporting KOSDAQ-listed companies through growth phases, the market risks losing promising startups to international listings or capital reallocation. Institutional investment infrastructure thus becomes critical to maintaining Korea's competitive advantage in innovation-driven sectors and preventing brain drain of capital and talent to foreign markets.
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