New Venture Investment Act Amendment Ends Korea’s Founder Joint Liability, Redefining Risk in Venture Investment

Korea’s startup ecosystem is entering a turning point in how it defines responsibility and risk. By eliminating founder joint liability in venture investments, the government is not only reshaping legal foundations but also signaling a deeper shift toward a culture that values innovation over fear of failure. This new Venture Investment Act amendment marks a decisive recalibration of partnership, accountability, and trust for both founders and investors. National Assembly Advances Founder Protection Under the Venture Investment Act On November 21, the Venture Investment Promotion Act (VIPA) amendment passed the National Assembly’s Industry, Trade, and SMEs Committee, introducing a legal ban on clauses that make startup founders personally responsible for company debts under venture investment contracts. The amendment, welcomed by the Korea Startup Forum (KOSPO) on November 26, elevates what had previously been an administrative guideline into binding law. It also prohibits venture capital firms, individual investment associations, and startup accelerators from demanding joint liability through investment agreements. This legislative change effectively dismantles a structural barrier that long discouraged entrepreneurs from re-entering the startup scene after failure, ensuring that founders are…