How to Design Public Venture Capital Funds: Empirical Evidence from South Korea


  • Sojin Lim,

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    • Sojin Lim is associate research fellow in IP Research Center at Korea Institute of Intellectual Property.
  • Yeonbae Kim

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    • Address correspondence to: Yeonbae Kim, Technology Management, Economics, and Policy Program, Seoul National University, 599 Gwanak-ro, Gwanak-gu, Seoul 151–747, Korea. E-mail:

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    • Yeonbae Kim is associate professor in Technology Management, Economics, and Policy Program at Seoul National University.


This study examines the effects of several features of government-managed, sponsored venture capital (VC), and private VC funds on overall VC investments in new technology-based firms (NTBFs) during two developmental stages (i.e., growth and restructuring) in South Korean VC market and suggests hints for designing effective government VC programs. Our results from data on 463 funds in the period 1995–2005 indicate the factors bearing a positive effect on VC investments targeted to NTBFs. Such factors are the fund specialization focusing on certain industrial sectors, performance-sensitive compensation for venture capitalists in private and government VC funds.