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Today, we will take an in-depth look at the Pre-TIPS program.

Pre-TIPS is an initiative designed to identify and support early-stage startups located outside the Seoul metropolitan area.

It provides up to 100 million KRW in commercialization funding to startups that are under 3 years old and have successfully attracted at least 10 million KRW in private investment.

Pre-TIPS aims to revitalize local startup ecosystems and discover outstanding technology-driven entrepreneurial talent, specifically selecting non-metropolitan startups for at least 60% of the program cohort.

Furthermore, to strengthen the integration between Pre-TIPS and the main TIPS program, participants in Pre-TIPS receive bonus points when applying for TIPS. Additionally, the investment attracted during the Pre-TIPS phase can be counted toward the qualifying investment requirement (investments sourced from an official accelerator) needed for TIPS entry. Let's dive deeper into the details of the Pre-TIPS program.

Program Benefits and Scale

• Government funding of up to 100 million KRW for commercialization

• Total budget of 4.3 billion KRW (supporting approximately 43 new startups) as of 2023

Eligibility Criteria

• Startups under 3 years old that have secured at least 10 million KRW in investment from qualified investors (at least 60% of selected startups must be headquartered outside the Seoul metropolitan area)

• Early-stage startups defined under Article 2 of the Support for Small and Medium Enterprise Startups Act, which have been in operation for less than 3 years from their official business commencement date as of the public announcement date, and meet all of the following requirements:

  • Minimum of 2 full-time employees, including the representative *Based on the 4 major social insurance workplace subscriber roster on or after the announcement date (must be maintained through the agreement execution date)

  • Secured a total investment of at least 10 million KRW from qualified investors within 1 year prior to the public announcement date

Ineligibility and Exclusions

• Individuals or corporations currently restricted due to delinquent national or local taxes

• Individuals or corporations currently restricted due to debt default by financial institutions

• Cases where the startup's qualifications do not meet the application requirements, or the proposal does not align with the program goals and announcement details

• Individuals or corporations currently suspended from business operations as of the application date

• Individuals or businesses engaged in restricted industries under Article 4 of the Enforcement Decree of the Support for Small and Medium Enterprise Startups Act

• Individuals or businesses currently executing projects after being selected for "TIPS R&D" or "Startup Commercialization Support Programs" by the Ministry of SMEs and Startups (MSS) - Investors whose registration has been revoked by the Ministry of SMEs and Startups as of the application date - Other entities deemed ineligible by the Minister of SMEs and Startups due to participating restrictions

Eligible Investor Types

Specific standards apply to eligible private investors. Startups cannot apply for Pre-TIPS if their investor does not fall under one of the categories below, so please review this list carefully.

① Accelerators (registered with the Ministry of SMEs and Startups)
② Early-stage venture capital firms (including LLCs, etc.)
③ Corporate investors (small/medium enterprise partners, mid-market enterprises, conglomerates, etc.)
④ Global investment and incubation specialized institutions
⑤ Others (technology holding companies, specialized new technology startup companies, etc.)
⑥ Angel investment clubs (micro-VC registry)

Required Documents

• Business plan, proof of investment payment, shareholder registry, investment confirmation letter, integrity pledge, corporate registration certificate, business registration certificate, 4 major social insurance workplace subscriber roster, and other documents supporting bonus eligibility

Application Timeline (2023 Basis)

• 1st Round: February to March

• 2nd Round: June

• 3rd Round: September

Selection Procedure and Evaluation Process

• ① Application Submission (Investor/Startup) → ② Qualification Review (Managing/Operating Agency) → ③ Document Evaluation (Operating Agency) → ④ Presentation Evaluation (Operating Agency) → ⑤ On-site Due Diligence (Operating Agency) → ⑥ Final Selection (Managing Agency)

• (Managing Agency) Korea Institute of Startup and Entrepreneurship Development (KISED); (Operating Agencies) Korea Angel Investors Association, Korea Institute of Science and Technology (KIST), Korean Venture Capital Association (KVCA)

Today, we explored the details of Pre-TIPS. Similar to Seed-TIPS, Pre-TIPS is a highly beneficial program that startups can apply for prior to entering the main TIPS program. This funding supports essential areas such as labor costs and materials, providing a strong foundation for businesses to move beyond survival and prepare for long-term growth. With upcoming announcements expected for 2024, thorough preparation starting now will pave the way for a successful application.

We will return soon with more insightful resources and content.
Thank you.

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