A recipe for start-up success

Angel investors are companies and individuals that provide seed money for business start-ups. They differ from venture capital, which invests in companies that are already active but show a promising future. The former tend to get more actively involved, however, from developing technology to hiring personnel and raising more capital. They draw up business plans and are more willing to incubate other new start-ups than other investors, as they know how tough getting started can be.

Douglas Guen is the co-chief executive of Primer, a company that incubates new ventures. Guen, who founded e-payment gateway service provider Inicis in 1998, recalled how frustrated and lost he had been during the early stages of setting up the enterprise. He failed and lost money because of trivial mistakes that could easily have been avoided if he had better advice. Moreover, some of his advisers demanded a stake in the company in return for basic counseling. He instead sought help from other technology start-ups, specifically, Daum Communications co-founders Lee Jae-woong and Lee Taek-kyung, and Chang Byung-gyu of Neowiz. They discussed issues and relied upon one another to find solutions to their common problems. Eventually, they teamed up to establish Primer along with a number of illustrious figures, including Song Young, founder of California-based NComputing, NHN founder Kim Beom-su and Chester Roh, co-founder of blogging software company Tatter and Company, which was later acquired by Google. Together, they represent the country’s first generation of venture entrepreneurs, having started their businesses from the late 1990s to the early 2000s.

A healthy flow and recycling of capital and experience is exactly what is needed for a sustainable and successful start-up culture. Silicon Valley pioneer Fairchild Semiconductor, which was founded in 1957, is a good example of this. It helped to create about 60 venture companies, with one spun off after another until Intel, the world’s largest semiconductor company, was born. In this respect, angel groups or investors are like the roots of a tree.

Now, the government is trotting out programs to support start-ups. But to build a healthy and long-term culture of success in this area, the country needs strong fundamentals, including a good system of promoting them and an environment that encourage risk and tolerates mistakes. Instead of rolling out half-baked ideas, the government should listen to entrepreneurs and incorporate their ideas into policy making.