COVID-19 has changed the venture capital space at an unprecedented level and due to the resulting unpredictable and unstable economic and business environment, venture capitals have already geared up with stricter conditions when investing in early stage start-ups.
This article, contributed by Senior Foreign Legal Counsel Joon Kee Bahng and published in the Korean Venture Capital Association's July 2020 edition of VC Discovery (Pages 5 - 10), briefly covers some of those conditions such as founder's joint and several liability, reserved matters, and anti-dilution. However, the venture capitals must never forget that the main pillars of a start-up's success are innovation and speedy result, and therefore, should always strive to strike a balance between imposing stricter investment conditions but not damage these key elements of a start-up. After all, let's not forget what the word "venture" truly means to a venture capital and that Uber and Airbnb were also born during an unpredictable and unstable time - the financial crisis.
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