Employee diversity and exposure to global markets are two major areas that need to be improved in Seoul‘s growing startup ecosystem, according to the first edition of a white paper released by the Korea Startup Ecosystem Forum Wednesday.
The research found that just 9 percent of surveyed startup founders were female, and only 17 percent of the surveyed companies had one or more non-Korean employee. This is low when compared to Silicon Valley where female CEOs account for 24 percent and 45 percent of employees are foreign.
The white paper was compiled from June to October under the supervision of the KSEF’s four board members -- Google Campus Seoul, Born 2 Global, Startup Alliance and the National IT Industry Promotion Agency. Using a survey of 295 startups in Seoul and the neighboring Gyeonggi Province that are at least at the angel-funding stage and startup-related literature from overseas, the white paper captured a snapshot of the current startup ecosystem here.
Hwang Byung-sun of Bigbang Angels (4th from left) answers a question from reporters at Campus Seoul in Gangnam-gu, Wednesday. Also pictured: Head of Google Campus Seoul Jeffrey Lim (far right). (Google)
The survey shows that the average Korean startup entrepreneur is a male engineer in his mid-30s with at least five years of experience who is working with at least one other co-founder. Most Korean startups in Seoul were focused in the Gangnam area, which offers easier access to knowledge and resources with roughly 10-20 startup-related events taking place in the area every day.
The average startup has 2.78 founding members with an initial investment of $27,000, and takes four years to reach Series A investment. Just over half of startups were focused in the mobile internet industry.
“There is a lot of literature about startup ecosystems abroad, not only in Silicon Valley but also in places like Singapore, London and Tel Aviv, but Seoul is always missing,” said Jeffrey Lim, Head of Google Campus Seoul, at a press conference at Campus Seoul in Gangnam-gu.
“For this white paper we referred to the format of similar research papers from abroad so that investors and researchers overseas can use it as a reference on Seoul.”
Back Sang-hoon, a professor at Keimyung University said that the ecosystem here has shown fast growth over the past four years in that the process for startups to form, grow and exist has become more concrete.
According to Back, this clarity in the pipeline is important for attracting more entrepreneurs, especially those with business experience at large companies.
Much of the growth was credited to supportive government policies and funding, which Korean startup entrepreneurs generally rated positively.
“For now, I think it is appropriate for the government to provide support to help investors hedge their bets at this point in Korean startup development,” said Hwang Byung-sun, managing director at angel investment club and consultancy Bigbang Angels, when asked whether Korea should aim for a private sector-fueled ecosystem like that in Western startup hub cities. “The government has helped accelerate growth for the past four years. The question is how those policies should change in the future.”
While providing support, however, there were also concerns about government restrictions that are making it hard to secure talent from overseas. “It is very complicated to receive a visa to work at a startup in Korea,” said Google Campus Seoul‘s Jeffrey Lim. “There is no system for allowing people to work in Korea through investments in startups, like in other countries. This is an area that should become more deregulated.”
“Korea is an attractive place for entrepreneurs in specific industries,” Lim also said, citing high interest in Korea’s gaming, entertainment, fashion, design and beauty sectors. “There are industries where Korea is very competitive, and overseas talent that hopes to work here.”
By Won Ho-jung (email@example.com