Company building refers to an approach that strategically designs and grows the entire startup lifecycle, from idea generation and market validation, team formation, capital and infrastructure investment, and management. The organization that carries out this process is a company builder, sometimes called a startup holding company or startup studio. Unlike traditional venture capital firms (VCs) or accelerators (startup planners, Accelerators), which primarily serve as investors, company builders participate in decision-making and directly share risks as co-founders from the inception stage.
Company builders are generally categorized into three types: subsidiary, professional management, and business sophistication. The subsidiary type refers to the type in which the company builder spins off the company and then takes the lead in management. The professional management type refers to the type in which a company builder starts a business with an idea and grants autonomy after appointing a manager. The business sophistication type refers to the type in which aspiring entrepreneurs with an idea proceed with the business through the company builder. However, this only means that company builders can be generally divided into these types; in reality, the distinction between these types is not clear-cut, and a mixture of the three types often operates. Company builders are crucial in controlling initial risks in high-risk, high-tech fields and institutionalizing the startup process into a repeatable process.
While the number of quantitative startups has increased, the Korean startup ecosystem has repeatedly faced bottlenecks in scale-up and global expansion. This is due to a significant lack of strategic execution capabilities that cannot be addressed solely through capital, particularly in the stages of idea validation, team building, and early product-market fit (PMF) exploration. Company Builder fills this gap. It integrates the preliminary planning and execution of startups, absorbing the high-risk early stages of failure into a portfolio strategy, and serves as a bridge between public policy and private sector implementation.
In particular, in high-risk fields such as bio, artificial intelligence, robotics, and green technology, it can drive a qualitative transformation of the ecosystem as an intermediate organization designed to strategically manage initial uncertainties that private capital finds difficult to shoulder on its own.
A shift in the system from "investing in established companies" to "creating companies and making them independent."
In Korea, Fast Track Asia has presented a model for early-stage builders through Goodoc, Watcha, and ZigZag. Internationally, Germany's Rocket Internet accelerated its expansion into emerging markets through a replication strategy, while France's eFounders and the campus-style Station F demonstrated building SaaS and large-scale integration models. In the US, Betaworks seamlessly integrated builders, investments, and accelerators in the media and tech sectors, creating companies like Giphy and Bitly. Furthermore, the Singapore Deep-Tech Alliance provided a model for government-led deep-tech builders. The common denominators shared by these examples include co-founding, investment and focused support, and portfolio diversification.
Nevertheless, Korea's investment-related laws have long been designed around a dichotomous structure of "investors and entrepreneurs," broadly restricting the management control of accelerators (startup planners) over investee companies or subsidiaries. Article 17, Paragraph 3 of the Enforcement Decree of the Venture Investment Promotion Act (Venture Investment Act) and Article 15 of the Enforcement Rules prohibit all actions, including holding more than 50% of voting rights, the power to appoint and dismiss a majority of directors, holding concurrent positions as CEO, and exercising a majority of voting rights at general shareholders' meetings, as deemed management control. This effectively conflicts with the very nature of joint venture company builders. This regulatory environment has limited meaningful management involvement to manage initial uncertainty, ultimately reducing the efficiency of strategic startups.
The turning point was the revision of the Enforcement Decree of the Venture Investment Act, which passed the State Council on July 29, 2025, and went into effect on August 5. Key to this was the expansion of the scope of investment permitted for the purpose of management control by startup planners. The phrase limiting it to "early-stage startups directly selected and nurtured" was removed (Article 17, Paragraph 3, Subparagraph 1). This allowed for the establishment of joint subsidiaries with prospective entrepreneurs within the system. However, the requirements of holding shares for at least six months from the date of establishment of management control and selling all shares within seven years (with a one-year extension if necessary) were maintained. This allowed startup planners to fully assume the role of typical company builders, combining planning, team building, subsidiary establishment, and management participation in a "venture studio/idea lab" fashion.
This revision of the Enforcement Decree of the Venture Investment Act is only the starting point for allowing company builders, but various practical efforts are needed to ensure their success. First, while startup planners establish and manage subsidiaries as builders, it is necessary to establish internal control structures and conflicts of interest mitigation measures. Second, a roadmap for the gradual transfer of management rights should be incorporated into investment contracts and shareholder agreements (SHAs) to eliminate unnecessary disputes during the growth phase. Third, specific rights and obligations regarding intellectual property (IP) and data ownership and usage rights should be established early on. Failure to clearly define ownership of pre-launch deliverables, licensing structures, and transfer, joint ownership, and licensing conditions for spinoffs can lead to problems. Meanwhile, from a policy perspective, simultaneous public-private partnerships are essential. "Policy-based company builders" incorporating the Korea Technology Finance Corporation, mother funds, and government-funded research institutes can mitigate the investment risks of deep-tech startups that private company builders often struggle to manage. Additionally, policy can provide tax benefits and tax deferrals on equity recovery to company builders who meet performance and internal control requirements.
In short, Company Builders are not simply investment institutions; they are platforms that strategize innovative capital and execution capabilities, and they can become agents of innovation in Korea. This revision to the Enforcement Decree of the Venture Investment Act finally opens the legal door for startup planners to jointly establish subsidiaries with prospective entrepreneurs and participate in their early management. A well-designed Company Builder saves entrepreneurs time, reduces investors' risk, and lowers the cost of innovation for society as a whole. It is hoped that the institutional approval of Company Builders in 2025 will mark the beginning of establishing a "strategized startup system" in Korea.
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