Start-up leaders launch a fund to give back
The five start-up leaders involved in the project are Daum Kakao co-founder and Chairman Kim Bum-soo, NXC CEO Kim Jung-ju, NCSoft CEO Kim Taek-jin, Daum founder and former CEO Lee Jae-woong and Naver founder and Chairman Lee Hae-jin.
It is unusual for owners of successful start-ups to open a joint fund using their personal money, but these five are doing it to give a portion of their wealth back to society.
The five IT leaders will gather every three months to decide who they will give financial support to.
The initiative originated in May when the CEOs jointly established a company called C Program, after their motto: creativity, challenge, change and collaboration.
Together, the successful start-up owners sought out new companies, scientists and nonprofit organizations that are financially weak but are working for public good, and gives them financial and management assistance.
Their fund invests only with the goal of initiating social change. It is different from a venture capital, which helps start-ups with loans.
Some North American and European IT giants such as Microsoft Co-founder Paul Allen and EBay Founder Pierre Omidyar have also engaged in similar philanthropic activities.
The Ebay founder started a venture capital fund worth about $200 million exclusively for start-ups that were doing work on the UN’s Millennium Development Goals, according to a report from the Financial Times.
C Program has a set of investment principles that it uses to decide which company, organization or NGO to support.
“We are looking for investment recipients that are doing business in different areas, such as environment, science, education and children’s activities,” said Uhm Yoon-mi, CEO of C Program. “We hope to play a role in connecting different businesses and organizations so that they can take the lead in bringing social change.”
“At the beginning, these five CEOs were young people who started with empty hands, but they later became successful businessmen,” Uhm added.
“That’s why they again chose to start a venture philanthropy business, which allows us to react quickly and flexibly when sponsoring these start-ups. In this time of rapidly changing business environments, we will constantly evaluating each business’s development and will give them what they need.”
The five IT legends decided to give financing on a project-by-project basis, looking for companies that were previously denied funding from a different venture capital because they were not able to produce a profit in a short period of time.
Their first investment recipient is the global NGO National Geographic Society, which supports basic science researchers, explorers and environment activists. The C Program will be investing a total of 5 billion won over a five-year period in the group, during which time the NGO will establish an Asia regional fund office in Seoul.
The investment fund by the five IT leaders is meaningful because they all began their careers at small, humble start-ups.
Each CEO has also separately founded venture capitals or public trusts to foster start-ups in their early stages when they can easily fall into a slump due to a lack of money.
But this time, Daum founder Lee and NXC CEO Kim are encouraging the other three CEOs to start a joint project. Both Lee and Kim recently moved their companies’ headquarters to Jeju, and both also have their own venture capital.
The five were also friends in college. Kim Bum-soo, Kim Jung-ju and Lee Hae-jin entered Seoul National University in 1986 together, and Kim Taek-jin was a year ahead of them. Kim Jung-ju and Lee Hae-jin were roommates at Kaist, and Lee Jae-woong and Lee Hae-jin lived in the same apartment complex.
BY PARK SU-RYON [firstname.lastname@example.org]
with the Korea JoongAng Daily
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