• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.17 no.1
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• pp.63-77
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• 2022

The importance of start-ups and venture companies in the Korean economy is growing. However, the successful growth of startups and venture companies are still challenging as 70% of startups fail within 5 years. A new perspective on innovation is essential to overcome the liability of newness and the liability of smallness in the existing market and obtain the competitive advantage. Recent phenomenon in the Korean startups ecosystem is the remarkable growth of unicorns and future unicorns. Their business models, types of business, and success cases serve as a good example. Neverthless, the process of unicorn and future unicorn startups making new industries and innovative business has poorly understood. In this paper, we first define 175 unicorns and future unicorn startups participating in the K-unicorn project as a unicorn group and analyze current trends of the group. Then the in-depth analyses of industry sectors are conducted. Specifically, focusing on the unicorn forming the new market, we examine the unicorn making the processes of industry category innovation through the business innovation model. Lastly, broadening the scope of the analysis to the unicorn group, policy implications in startups and venture ecosystem are suggested.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.18 no.1
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• pp.173-188
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• 2023

This paper analyzed the Earnings management of firms selected as preliminary Unicorn. If a manager is selected as a preliminary unicorn firm, he can receive financial support of up to 20 billion won, creating a factor in managing the manager's earnings. The motive for management's earnings management is related to the capital market. Accounting information is used by investors and financial analysts, and corporate profits affect corporate value. Therefore, if the accounting earning is adjusted upward, the corporate value will be raised and investment conditions will be favorable. In this paper, earnings quality was measured by the modified Jones model of Dechow et al.(1995) by the ROA control model of Kothari et al.(2005) among the discretionary accruals estimated using an alternative accrual prediction model. Competing similar companies in the same market as the selected companies were formed, and the discretionary accruals were mutually compared to verify the research hypotheses, and only the selected companies were analyzed for the audit year and after the audit year. As a result of the analysis, it was found that the companies selected as preliminary unicorns had higher earnings management compared to the corresponding companies in question, which had a negative impact on the quality of accounting profits. It was found that the companies selected as preliminary unicorns continued to receive incentives for management's earnings management even after being selected. These results indicate that the companies selected as prospective unicorns are recognized for their value in the market through external growth rather than internal growth, and thus, incentives for management's earnings management to attract investment from external investors under favorable conditions are continuing. In the future preliminary unicorn selection evaluation, it was possible to present what needs to be reviewed on the quality of accounting earning. The implication of this paper is that the factors of management's earnings management eventually hinder investors and creditors from judging the reliability of accounting information. It was suggested that a policy alternative for the K-Unicorn Project, which enhances reliability were presented by reflecting the evaluation of earnings quality through discretionary accruals.