Being an Investor of Venture Investors

I am currently working with Korea Telecom (“KT”). KT currently invests in two dozen of venture capital funds as a limited partner. Strategic VC fund investment serves two purposes. First, it gives access to a newer and more promising opportunity. Second, it helps to achieve attractive return. Strategic and policy-driven investment mandate does not guarantee tangible outcome. It is, therefore, very important to keep balance between strategic and financial goals. It is like chasing two rabbits at the same time.

Money allocation to venture capital does not sound like sexy investment idea these days. VC still delivers results, though. Korea top tier VC return multiple over past 10 years is 1.2x. U.S. top tier VC return multiple over past 10 years is 1.3x. It is not like when VC asset class used to deliver solid 4~6x in the middle of 1990s. VC is still quite competitive. To give you a number, $1.4B goes into ventures in Korea and $26.5B in the U.S. (If you count angel investment, it comes close to $50B.) Excessive money supply in venture capital may do good creating a couple of good companies, but not necessarily make the great ones with huge impact.

As of today, we monitor 400+ projects and investments under KT’s VC fund exposure. KT also invests overseas. KT often looks for further business collaboration opportunity with portfolio companies. KT started very first VC fund investment back in 2006. There should have been a great deal of learning curve in the beginning. Now, the size has grown to $350M. It feels more comfortable to manage this relatively new and fully VC focused program. We see some serious distribution from our managers as well. It is time to think of how to squeeze more value out of it and more consistently generate return.

Personally, I enjoy exploring different perspective as an investor to a VC fund. Only drawback is that now I have to see a promising new start-up with bird’s-eye view.

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New Year’s Resolution

Dear all:

It was great privilege to be spend last 4 months at Yale campus as a Yale World Fellow. All incoming 2013 cohort was truly incredible. They were colorful people and they were meant to be different. There were lots of stories to be told to inspire and get inspired. Now, I am happily back in my Seoul office gearing toward for a new year. It is also great to be joined by family and friends during holidays. I wish all the best to you all.

I have picked up few key words as part of my new year’s resolution. Relationship, fitness, and influence are top three key words that I doodled on my notepad this morning. More detail plans would be shared but if I highlight what they mean here briefly:

• Relationship: I highly value relationship that has enabled me to grow and do great things. As a network of entrepreneurs, technologists, and many other interesting people who do interesting stuffs is growing, I would focus on strengthening those relationships and building strong common ground.
• Fitness: It includes both mental and physical fitness. Practice makes perfection. It is always good to be lean and agile. Fitness also means to me insight to create a right fit between numerous people and projects.
• Influence: Doing interesting things is not enough to me. I hope to build strong social impact. Venture start-up is sustainable only if it makes positive change into many lives around the world. I will try to discern and wisely invest my time and resource for idea and people who have great potential to change the world.

I plan to describe a couple of new initiatives and share what I hear from the market lately shortly. In the mean time, happy new year to you all and make your new wishes come true!

Thank you.

Cheers,
Daniel Shin