• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.11 no.4
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• pp.1-15
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• 2016

Startups in Korea are experiencing for themselves the laws of survival through competition in the local and international market, and are performing active business movements based on these. Korea's economic growth rate is 2.6% due to the slump in the domestic demand and reduced exports brought by the MERSC incident in 2015. The Korea Development Institute has estimated the economic growth rate in 2016 to be around 3.0%. South Korea's economy is facing the crisis of low-growth solidification due to the decrease in economic growth, and it is forecasted that growth without employment and polarization will worsen. Startups in the high-tech industrial generation of a particular field wherein the market environment is rapidly changing must maintain a competitive advantage with the capabilities and functions exclusive to them. It is very important that they maintain a competitive edge by utilizing the capabilities exclusive to startup companies. Likewise, the accumulation of resources is also crucial in determining the success of a startup business. In a poor local startup ecosystem, majority of the startup companies are performing their business activities while striving for survival, rather than success. About 80% are struggling to survive and are failing to overcome the "Death Valley" faced 3-5 years after establishing the company. Since majority of the startups fail to achieve results during the initial stages of foundation, the importance of research on business activities and achievement during the early stages of establishment is being raised. In accordance to this, this research has performed an actual analysis on how the activities of startups during their preparation phase and early stages affect their achievements. A survey was done on the CEOs or executives (people in a position to make decisions) of local small and medium-sized enterprises that are considered start-ups, and 203 valid data were collected and analyzed. Results showed that the discoveries and utilized activities necessary for the businesses of startups have a significant impact on their achievement through the entrepreneur resources and external partners' cooperation; additionally, the related implications were discussed.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.18 no.1
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• pp.253-270
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• 2023

Research on investment determinants of accelerators, which are attracting attention by greatly improving the survival rate of startups by providing professional incubation and investment to startups at the same time, is gradually expanding. However, previous studies do not have a theoretical basis in developing investment determinants in the early stages, and they use factors of angel investors or venture capital, which are similar investors, and are still in the stage of analyzing importance and priority through empirical research. Therefore, this study verified for the first time in Korea the discrimination and effectiveness of investment determinants using accelerator investment determinants developed based on the business model innovation framework in previous studies. To this end, we first set the criteria for success and failure of startup investment based on scale-up theory and conducted a survey of 22 investment experts from 14 accelerators in Korea, and secured valid data on a total of 97 startups, including 52 successful scale-up startups and 45 failed scale-up startups, were obtained and an independent sample t-test was conducted to verify the mean difference between these two groups by accelerator investment determinants. As a result of the analysis, it was confirmed that the investment determinants of accelerators based on business model innovation framework have considerable discrimination in finding successful startups and making investment decisions. In addition, as a result of analyzing manufacturing-related startups and service-related startups considering the characteristics of innovation by industry, manufacturing-related startups differed in business model, strategy, and dynamic capability factors, while service-related startups differed in dynamic capabilities. This study has great academic implications in that it verified the practical effectiveness of accelerator investment determinants derived based on business model innovation framework for the first time in Korea, and it has high practical value in that it can make effective investments by providing theoretical grounds and detailed information for investment decisions.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.18 no.3
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• pp.127-139
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• 2023

During the process of preparing for and initiating a startup, startup entrepreneurs allocate a significant amount of time to developing a business plan. Within this process, the documented business plan serves not only as a roadmap for the venture but also as a communication tool for capital acquisition and internal team collaboration. However, is the business plan, meticulously crafted by entrepreneurs, actually effective in generating startup performance? To answer this question, this study empirically analyzed the impact of a business plan on startup performance. Additionally, it examined how the relationship between the business plan and performance changes based on the satisfaction levels of entrepreneurs regarding the business plan. Through the analysis, the study validated the influence of the completeness of the business plan and entrepreneurial satisfaction on startup performance, and derived implications. To conduct the empirical analysis, a survey was conducted among 150 entrepreneurs. Regression analysis was performed to examine the relationship between the completeness of the business plan and performance, and the sample was further divided into two groups: startups with less than three years of operation and startups with three or more years of operation, for secondary analysis. The analysis results revealed that the completeness of the startup's business plan has a positive impact on both financial and non-financial performance. Furthermore, it is observed that the entrepreneur's satisfaction with the business plan had a moderating effect on the relationship between the business plan and financial performance. Moreover, for startups that are less than three years old, the entrepreneur's satisfaction with the business plan exhibits a moderating effect on the relationship between the completeness of the business plan and non-financial performance. This study holds significance as it reaffirms the importance of business plan development as a means to achieve sustainable growth for early-stage startups and empirically validates its significance. It is expected that this study will provide valuable insights for future startup entrepreneurs to better understand the importance of business planning and contribute to reducing the failure rate of early-stage startups.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.18 no.1
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• pp.141-158
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• 2023

From the perspective of an entrepreneur, one of the most important factors for understanding the inherent limitations of a startup, reducing the risk of failure, and succeeding is the composition of the talent, that is, the founding team. Therefore, a common concern experienced by entrepreneurs in the pre-entrepreneurship stage or the early stage of startup is the choice between independent startups and co-founding start-up. Nonetheless, in Korea, the share of independent entrepreneurship is significantly higher than that of co-founding start-up. On the other hand, focusing on the fact that many successful global innovative companies are in the form of co-founding start-up, the success factors of co-founding start-up were examined. Most of the related preceding studies are studies that identify the capabilities and characteristics of individual entrepreneurs as factors influencing the survival and success of entrepreneurship, and there is a lack of research on partnerships, that is, co-founding start-up, which are common in the field of entrepreneurship ecosystems. Therefore, this study attempted a multi-case study through in-depth interviews, collection of relevant data, analysis of contextual information, and consideration of previous studies targeting co-founders of domestic startups that succeeded in opportunistic startups. Through this, a model for deriving the phased characteristics and key success factors of co-founding start-up was proposed. As a result of the study, the key element of the preliminary start-up stage was 'opportunity', and the success factors were 'opportunity recognition through entrepreneur's experience' and 'idea development'. The key element in the early stages of start-up is "start-up team," and the success factor is "trust and complement of start-up team," and synergy is shown when "diversity and homogeneity of start-up team" are harmonized. In addition, conflicts between co-founders may occur in the early stages of start-ups, which has a large impact on the survival of start-ups. The conflict between the start-up team could be overcome through constant "mutual understanding and respect through communication" and "clear division of work and role sharing." It was confirmed that the core element of the start-up growth stage was 'resources', and 'securing excellent talent' and 'raising external funds' were important factors for success. These results are expected to overcome the limitations of start-up companies, such as limited resources, lack of experience, and risk of failure, in entrepreneurship studies, and prospective entrepreneurs preparing for a start-up in a situation where the form of co-founding start-up is attracting attention as one of the alternatives to increase the success rate. It has implications for various stakeholders in the entrepreneurial ecosystem.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.9 no.4
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• pp.41-53
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• 2014

There has been lots of discussions and new policies to encourage people to start new businesses. However, they key issue such as how to raise the success rate of new start-ups still needs to be resolved. Many believe that the success of policies and discussions for promoting entrepreneurship in Korea highly depends on how to lower the risks with which early stage start-ups encounter. In this backdrop, this study aims at providing an emerging approaches in entrepreneurship, 'lean start-up', which can work as an effective method with which early stage entrepreneurs can minimize challenges they face. Even though lean start-up is a widely accepted concept among practitioners and recognized as a useful tool for entrepreneurship and education, but has not got deserved attention from the academic world. This paper offers basic framework and key principles of lean start-ups, furthermore, shows Korean cases of step-by-step application methods of its concepts. It also suggest key issues in adopting lean start-up strategy. This study has implications and contributions for entrepreneurs, educators and researchers through providing comprehensive perspectives on process of the lean start-up strategy.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.18 no.5
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• pp.91-107
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• 2023

Lean startup is a concept that combines the words "lean," meaning an efficient way of running a business, and "startup," meaning a new business. It is often cited as a strategy for minimizing failure in early-stage businesses, especially in software-based startups. By scrutinizing the case of a startup L, this study suggests that lean startup methodology(LSM) can be useful for hardware and manufacturing companies and identifies ways for early startups to successfully implement LSM. To this end, the study explained the core of LSM including the concepts of hypothesis-driven approach, BML feedback loop, minimum viable product(MVP), and pivot. Five criteria to evaluate the successful implementation of LSM were derived from the core concepts and applied to evaluate the case of startup L . The early startup L pivoted its main business model from defecation alert system for patients with limited mobility to one for infants or toddlers, and finally to a smart bottle for infants. In developing the former two products, analyzed from LSM's perspective, company L neither established a specific customer value proposition for its startup idea and nor verified it through MVP experiment, thus failed to create a BML feedback loop. However, through two rounds of pivots, startup L discovered new target customers and customer needs, and was able to establish a successful business model by repeatedly experimenting with MVPs with minimal effort and time. In other words, Company L's case shows that it is essential to go through the customer-market validation stage at the beginning of the business, and that it should be done through an MVP method that does not waste the startup's time and resources. It also shows that it is necessary to abandon and pivot a product or service that customers do not want, even if it is technically superior and functionally complete. Lastly, the study proves that the lean startup methodology is not limited to the software industry, but can also be applied to technology-based hardware industry. The findings of this study can be used as guidelines and methodologies for early-stage companies to minimize failures and to accelerate the process of establishing a business model, scaling up, and going global.

• Asian Journal of Innovation and Policy
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• v.12 no.1
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• pp.001-026
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• 2023

This paper dealt with the Korean manpower policy in science and technology, focusing on the contents and tools of the Special Act and its Master Plans. After briefly introducing the historical development of the Korean manpower policy from the 1960s to the present, it discussed and analyzed the Special Act and Plans from the framework of personnel development, distribution, utilization and infrastructure. Korea's science and technology manpower policy has focused on fostering and supplying manpower in line with the country's industrial growth strategy. In the early stage of industrial development during the 1960s and 1980s, government research institutes were direct and effective tools for nurturing S&T manpower. Since the 1990s, the importance of university research has increased. The government fostered graduate research manpower through the research-oriented university policy of the BK21 program. After the IMF financial crisis in 1997, the tendency of students to avoid careers in science and technology led to enacting the Special Act (2004) governing the field of S&T human resources. The Special Act has contributed to leveling up the university education system in science and engineering and sophisticated the policy to include entrepreneurship training, spin-off startups, industry-university cooperation, and offering degree programs. The Special Act and the regularly revised Master Plans have been essential tools in systematically managing the science and technology manpower policies of the Korean government.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.12 no.6
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• pp.1-12
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• 2017

This paper is brought to asses the training effect of KS-QFD boot camp for the companies in the early growth stage. In particular, the focus of research falls on measuring transfer intension of the participants from the early stage companies older than three years old, motivating effect of applying knowledges acquired from KS-QFD training camp into their real business case. KS-QFD program is presented to help company in the early stage companies over three years old of boosting up their sales volume more than 5 times than now for the next 18 months by this training. The training program of KS-QFD is ultimately to design more practical and helpful program to real business and spread out. The research establish model by setting the learner readiness and perceived content validity by doing training design as independent variables, self-efficacy of learner as mediating variable, and transfer intension as dependant variable. Research results shows the following outcomes. First, learner readiness does not have directly effect on transfer intension under keeping statistical significance. But as the parameter of self-efficacy, it has perfect mediating effect. Second, research proves that perceived content validity have directly impact on learning transfer intension of mediating by self-efficacy partially. This research contributes on proving that learning by doing KS-QFD boot camp enable the participants to build up their self-efficacy and lead to enhance transfer intension. In more steps, the research validates that KS-QFD training camp have delivered very practical and helpful on-site knowledge to the participants.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.15 no.2
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• pp.193-208
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• 2020

In this study, we investigate the effects of technology innovation investments and employment on credit ratings of very small start-up businesses using the data period of 2009 till 2015 test two hypotheses: asymmetric information hypothesis or competence hypothesis. We use financial and non-financial data of 51,903 observations of 12,028 small businesses from a database of a commercial bank and fixed effects panel models and two-stage instrumental variable models. We find that in the short-run small size startups show lower credit ratings than non-startups, and that both technology innovation activities and employment capability improve their credit ratings. In the long-run, technology innovation investments do not improve their credit ratings of later years while employment capability improve their credit ratings of the subsequent year. In addition, the age of startups improves their credit ratings of the current year and until the subsequent two years while employee productivity, fixed ratio and ROA positively affect their credit ratings for up to three years. However, short-term and overall debt ratios, cost of borrowings and firm-size negatively affect their credit ratings for up to three years. The results of the study on credit ratings suggest that credit rating agencies seem to consider both technology innovation activities and employment capability in the credit ratings of small start-ups as 'competence factors' rather than 'asymmetric information factors' with inefficiency and cost burdens. The results also suggest that we must find ways to reflect properly the severe asymmetric information of the early-stage start-ups, and technology innovation activities and employment capability in the credit rating formula.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.18 no.4
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• pp.21-35
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• 2023

Expectations surrounding generative AI technology and its profound ramifications are sweeping across various industrial domains. Given the anticipated pivotal role of the startup ecosystem in the utilization and advancement of generative AI technology, it is imperative to cultivate a deeper comprehension of the present state and distinctive attributes characterizing venture capital (VC) investments within this domain. The current investigation delves into South Korea's landscape of VC investment deals and prognosticates the projected VC investments by juxtaposing these against the United States, the frontrunner in the generative AI industry and its associated ecosystem. For analytical purposes, a compilation of 286 investment deals originating from 117 U.S. generative AI startups spanning the period from 2008 to 2023, as well as 144 investment deals from 42 South Korean generative AI startups covering the years 2011 to 2023, was amassed to construct new datasets. The outcomes of this endeavor reveal an upward trajectory in the count of VC investment deals within both the U.S. and South Korea during recent years. Predominantly, these deals have been concentrated within the early-stage investment realm. Noteworthy disparities between the two nations have also come to light. Specifically, in the U.S., in contrast to South Korea, the quantum of recent VC deals has escalated, marking an augmentation ranging from 285% to 488% in the corresponding developmental stage. While the interval between disparate investment stages demonstrated a slight elongation in South Korea relative to the U.S., this discrepancy did not achieve statistical significance. Furthermore, the proportion of VC investments channeled into generative AI enterprises, relative to the aggregate number of deals, exhibited a higher quotient in South Korea compared to the U.S. Upon a comprehensive sectoral breakdown of generative AI, it was discerned that within the U.S., 59.2% of total deals were concentrated in the text and model sectors, whereas in South Korea, 61.9% of deals centered around the video, image, and chat sectors. Through forecasting, the anticipated VC investments in South Korea from 2023 to 2029 were derived via four distinct models, culminating in an estimated average requirement of 3.4 trillion Korean won (ranging from at least 2.408 trillion won to a maximum of 5.919 trillion won). This research bears pragmatic significance as it methodically dissects VC investments within the generative AI domain across both the U.S. and South Korea, culminating in the presentation of an estimated VC investment projection for the latter. Furthermore, its academic significance lies in laying the groundwork for prospective scholarly inquiries by dissecting the current landscape of generative AI VC investments, a sphere that has hitherto remained void of rigorous academic investigation supported by empirical data. Additionally, the study introduces two innovative methodologies for the prediction of VC investment sums. Upon broader integration, application, and refinement of these methodologies within diverse academic explorations, they stand poised to enhance the prognosticative capacity pertaining to VC investment costs.