"Mismatch Between Companies' and Capital's Timelines... Must Be Addressed with 'Third Type of Capital'"

"Technology Commercialization Policy Co-Lab" Seminar
Kim Hongil, CEO of K-Unicorn Investment, Delivers Presentation
"Need for a 'Third Type of Capital' That Matches Companies' Timelines"

Venture investors have called for "third capital" to address the mismatch between the time it takes a company to grow and the time horizon of capital. The core idea is to design a market structure that builds long-term investment assets using donations, dormant budgets and other funds.

Kim Hongil, CEO of K-Unicorn Investment, presents on the topic “From the Time of Finance to the Time of Innovation” at the STEPI-Korean Economic Association Technology Commercialization Policy Co-Lab held at Front One in Mapo-gu, Seoul, on October 27, 2026. Photo by Jo Yongjun.

At the STEPI-Korean Economic Association Technology Commercialization Policy Co-Lab seminar held at Park Byeongwon Hall at Front One in Gongdeok, Seoul, on October 27, Kim Hongil, CEO of K-Unicorn Investment, gave a presentation titled "From the Time of Finance to the Time of Innovation." Kim said, "Third capital is about finding money that matches the time horizon of companies, and this is closely related to the question of market design."

Kim identified the mismatch between companies' time horizons and those of capital as a problem in South Korea's venture investment ecosystem. "For a deep-tech company founded by a researcher, it usually takes seven to eight years to validate a prototype, obtain approval, move to mass production and build production facilities," he said. "Considering that most funds have an eight-year term, the structure seems to make it fundamentally impossible for Korean funds to provide technology financing."

As examples of third capital, he cited the U.S. independent nonprofit investment organization IQT (In-Q-Tel) and the UK's National Security Strategic Investment Fund (NSSIF). Both institutions receive investment from government agencies. The government identifies technologies it needs, and the institutions make patient, long-term investments through the process of bringing those technologies to market. He also cited the UK, where some dormant bank budgets are transferred to a lottery fund and a portion is invested in long-term assets, and France, where a fund certification system allows insurers to invest in eligible companies.

He also highlighted institutions in South Korea that could serve as the seeds of "third capital," stressing that the country should build a market structure that fosters third capital by drawing on them. These include the Korea Fund of Funds, which provides financing to the venture ecosystem; the Korea Foundation for Youth Entrepreneurship (D.Camp), established with donations from financial institutions; and the Asan Nanum Foundation, a philanthropic foundation of the Hyundai Group.

"Singapore uses a portion of the revenue from permanent residency to invest in startups. It locks up 80% with the principal guaranteed for 10 years, and uses the remaining 20% to invest in technology funds in specific areas designated by the government or to match long-term investments," Kim said. "Because they have a mission, they seek out funds that can be invested over a long period." He added, "South Korea, too, should be able to find money that can match the time horizon of companies."

Kang Sungjin, president of the Korea Economic Association and a professor at Korea University, delivers congratulatory remarks at the STEPI-Korea Economic Association “Technology Commercialization Policy Co-Lab,” held at Front1 in Mapo-gu, Seoul, on Oct. 27, under the theme “A Major Transformation of Innovation Capital to Become One of the World’s Top Three Economies: Awakening Capital’s Potential to Surpass the Growth Threshold.” 2026.10.27 Photo by Cho Yongjun

Meanwhile, Kang Sungjin, president of the Korea Economic Association, said in his congratulatory remarks, "It is important to design sophisticated regulations that allow new initiatives while protecting investors and maintaining trust in the market." He stressed, "Along with providing funding, the government should improve regulations and institutions so that the private sector can identify investment opportunities and take risks on its own." He added, "I hope the practical experience and economic insights shared at today's seminar will lead to actionable proposals."

At the seminar, Park Heedeok, CEO of Translink Investment, presented on the shift from "joint guarantees" to "governance accountability," while Lee Yonggwan, CEO of Bluepoint Partners, spoke on the shift from "positive regulation" to "smart regulation." A panel discussion followed, moderated by Song Eungang, CEO of Capstone Partners, with Sung Hyoyong, a professor at Sungshin Women's University; Koo Junghoe, an executive director at LB Investment; and Choi Cheol, a professor at Hankuk University of Foreign Studies.

This content was produced with the assistance of AI translation services.