In 1992, “mobile phone” was rare in the market, and only a limited number of people had the so-called car phones in Korea. The domestic market was dominated by Motorola. However, in 1994, Samsung Electronics' mobile phones started to outdo Motorola. The success of Samsung Electronics stimulated Yuil Electronics to invest in keypad technology, and to complete localization in 1996. In the middle of 1997, Yuil Electronics prepared for the next generation keypad by applying new processes, new machines, and new concepts. That is, Yuil Electronics pursued hyper-competition strategy to maintain competitiveness in the market. In 2003, when the sales of Yuil Electronics ranked the first in the world, there seemed to be no limit in Yuil’s growth, being a star company in the KOSDAQ market. However, in the 6th generation of keypad technology, Yuil Electronics met some difficulties in cost control and automation. Their business became labor intensive and began to show a problem in the earnings structure. In the end, the company lost the market leader position, and continued to experience failures.

This study performed positive examination for the impacts of financing methods on asset investment and management performance and for the impacts of asset investment on management performance focusing on KOSDAQ venture firms. As the result, the financing methods, which have explanatory variables such as short- and long-term loan methods, company bond issuing methods and stock issuing methods, statistically significantly affected management performance variables including growth, profitability and liquidity. Explanatory variables had significant impacts on stock investment and land and building investment variables. In addition, such asset investment significantly influenced on management performance variables in the result of a path analysis. In the relationship between the financing methods and management performance variables, it had positive impacts on growth and negative impacts on profitability and fluidity, thereby supporting a pecking order theory (POT). In other words, it was analyzed that increment of financing causes increasing growth but reducing profitability and fluidity.

This paper examines the effects of the initial geographic target market on the performance of new ventures. In contrast to gradual internationalization of SMEs, new ventures known as born-globals identify and exploit business opportunities in the global market from the early stages of growth. There have been few empirical studies of the relationship between changes in the initial target market and the performance of new ventures. With 104 new Korean ventures in high-technology industries, this paper investigated the differences between local new ventures, born-again globals, and born-globals. New ventures that compete in the global market have a larger size and internationally experienced founding team members and relatively more external networking relationships. Changes in the initial geographic target markets have a significantly negative impact on the financial performance and long-term survival of new ventures. These results show that new ventures should be more cautious in terms of the ion of and changes to their initial geographic target markets. Finally, this paper suggests several implications for new ventures as they identify and exploit business opportunities and indicates future research directions in the area of the early internationalization of new ventures.

This study focuses on finding a more appropriate valuation methods of venture firms by analyzing non-listed firms valuation method suggested in a written opinion of practice by the Financial Supervisory Service and classifying non-listed firms into two groups : venture firms and non-venture firms during 2004~2006 with 3,464 firms/year listed in the Korean Stock Exchange market and KOSDAQ market.
Our main results are as follows :
First, we divided our sample firms into non-venture firms and venture firms and examined absolute error ratios by each valuation method. The results show that the sequence of absolute error ratios is DCF(discounted cash flow method), RIV(residual income valuation model) and PFM(proxy firm valuation method), which indicates that the most appropriate valuation method of venture firms is PFM.
Second, Frequency analysis also indicates that the weight of absolute error ratios under 0.5 shows the same sequence of each valuation method as the absolute error ratios analysis, which assures the most appropriate valuation method on venture firms is PFM.
The contribution of this study is to show that PFM(proxy firm valuation method) is a more appropriate valuation method than other valuation methods such as DCF and RIV in case of venture firms when we have to choose a more suitable valuation method among valuation methods suggested in a written opinion of practice by the Financial Supervisory Service.

Previous sdudies have questioned whether the internal R&D of the firm, especially the small and medium size firms (SMEs), is being crowded out by the external R&D support. This question caught more attention as the economy is increasingly being affected by the effect of R&D activity of the startup companies. However, the studies on the relationship between the internal R&D and external R&D of a firm still show inconsistent results, depending on the level of analysis, country of interest, and the research method in use. In this paper, we examine whether the internal and external R&D of SMEs in Korea are substitute or complement, using the ‘2005 Korean Innovation Survey:Manufacturing Sectors’. Using a structural equation model, we show that the internal and external R&D is complementary, ceteris paribus. Moreover, we find that the effect of government tax reduction policy on internal R&D and the effect of direct R&D funding on external R&D are both significant. Meanwhile, the effect of cooperative R&D with other firms on the external R&D of SMEs is positive and significant.

This study aims to come up with an alternative preventing ‘growing pains’, the risks caused by rapid growth of growing venture businesses. For this, literature study and empirical study were combined under the assumption that the system management structure using the concept of system will be built up as an alternative.
As for empirical analysis, the AHP method was adopted. The empirical test results are summarized as follows.
The activities ʻto build up growing venture business system management structureʼ consequently involve “the establishment of ERP intending the process organized under the direction of the management at the early growing stage if possible. This may be done by adjusting existing work to package type ERP at the MRP level, or by accompanying some customizing, with in mind that it should be completed within a short time using outside experts.”
This study present provisions for venture business to prepare for the risks of rapid growth and consistent growth. Futhermore, it is expected that this also will play efficient governmental policies supporting venture business and a positive role in sound development of the venture ecosystem.

This study examines the changing on role of venture capitalist backed IPOs after IT bubble burst. The paper investigates in more detail the certification role that venture capitalists add value to companies in which they invest by certifying them as the most promising ones, and the grandstanding role that young venture capitalists are more likely to conduct IPOs prematurely to falsely signal their reputation and performance, after IT bubble periods.
The paper finds that the certification role has been strengthened and that the grandstanding has been more likely to be disappeared since IT bubble blow up. The empirical results show that the firms whose characteristics are single, initial, fewer investment rounds, and lower investment ratio backed by venture capitalists reveal to more decrease the short-term excess returns of IPOs after IT bubble burst. It implies that the venture capitalists have particularly reinforced the certification role with respect to the firms applied lower level of the role. Moreover, the evidence also presents that the excess returns differences between KTB-backed IPOs and non KTB-backed has been decreased and that the age differences of IPO firms backed by two groups has been shortened. It suggests that the variation of IPO performances based on reputation of venture capitalists may be faded away after IT burble explodes.
The paper contributes that the sample extends over the periods of post burble burst and that the roles of venture capitalists related to IPOs are classified and analyzed in more systematical and comprehensive manner.

Venture companies and their founders have caught interests of academic researchers. However, CEO succession events in venture companies did not receive sufficient attention though CEO succession has been a popular research area in the field of corporate governance. Since the founder-CEO turnover is a significant incident to the venture, there is good reason to conduct research on determinants of founder-CEO turnover.
Originating from unique interests in venture companies and the founders who continue to lead the firm since its establishment, this study aims to identify major factors influencing founder-CEO succession in venture companies. Five hypotheses are developed from three different perspectives. First of all, drawing on the Organizational Life Cycle theory which demonstrates that founder-CEOs become incapable of managing the firm as it grows and in some point, should be replaced by professional managers, a hypothesis that very high and low growth rate of the firm (U-shaped) would lead to founder-CEO succession is developed. Next, this study goes one step further and tries to identify which factors diminish the chance of founder-CEOs being replaced. The second and third hypotheses relates to founder-CEO’s personal characteristics which enable him/her to better adapt to rapidly changing needs; founder-CEO’s prior work experience period and experience as a manager are hypothesized to lower the possibility of founder-CEOs being replaced. Lastly, founder-CEO’s power to resist the required turnover is operationalized by two factors, which are the founder-CEO’s equity ownership and whether a founder-CEO is the largest owner or not.
Data are collected from venture firms listed at KOSDAQ from 1998~2003 and after careful selection process, 307 firm-year data from 120 companies are analyzed using logit analysis based on event history analysis technique. Three out of five hypotheses are supported; i) very high and low growth rate of the firm decreases the chance of founder-CEOs being replaced, ii) if founder-CEOs had prior work experience in the managing role, chances of being replaced are reduced, iii) the larger the equity ownership of the founder-CEO, the smaller the possibility of experiencing turnovers.