Tech Startup Targeting [AC Association President's Weekly No. 114] Initial Investment Ecosystem: It's Time to Change the Operational Structure

The initial investment accelerator (AC) industry has led the front line of Korea's startup ecosystem for over a decade. However, the institutional and reward systems supporting these efforts have remained stagnant. Now, it's critical to redefine accelerators as the foundational infrastructure for startup growth. First, realistic compensation structures are needed. Current government support programs still rely on 10-year-old labor cost standards, making it difficult to hire and retain skilled professionals. Second, the AC account within the Maternal Fund must be expanded and separated. While the account exists, its scale is insufficient, and ACs face structural disadvantages when competing with venture capital (VC) benchmarks. Third, the nurturing function of ACs should be independently evaluated and rewarded. ACs lack the large AUM-based management fees typical of VC firms and face challenges in charging consulting fees like in the U.S. A dedicated nurturing account within the fund is proposed. Fourth, strengthen the integration of company building, TIPS, and R&D initiatives. Startups require more than capital; they need tech validation, prototype development, customer proofing, and R&D linkage. ACs that plan and validate company-building initiatives can connect with TIPS and R&D programs. Fifth, expand the scope of contractual projects to include ongoing support.