Key Takeaways
- • Lee Junseop, CEO of blockchain startup Gempeo, recounts how an early U.S. VC investment in August 2019, less than a year after the company's December 2018 founding, led him to neglect government-backed funding programs.
- • The virtual asset market downturn and the COVID-19 pandemic froze investment markets, leaving the company without funding sources just as it aged out of programs limited to startups under three or seven years old.
- • Founder advice: accept funding when it is offered, even when a company is performing well, because it can provide support later.
Summary
Lee Junseop, CEO of Gempeo, a blockchain technology company he co-founded in December 2018 with former colleagues, describes in an Asia Business Daily essay how early success in fundraising led to a funding crisis. The company received its first investment from a U.S. venture capital firm in August 2019, less than a year after founding, and received further investments in 2020 and 2021 when cash was low. The VC had prior experience exiting a blockchain-related investment and provided capital despite the company having no revenue.
Lee states that his central mistake was failing to research government-backed funding programs. South Korean programs cited in the article include eligibility windows for startups founded within the past three or seven years, and the TIPS program, under which the government provides research and development funding when an investor contributes a set amount. Lee said he explored none of them. The decline of the virtual asset boom and the onset of COVID-19 then caused the investment market to freeze, and by the time he sought alternatives, the company had aged beyond eligibility for programs favorable to young firms.
Lee describes the period as difficult. He declined loan offers because he considered debt inappropriate for the company, and he said investor meetings were often unproductive, including one investor who arrived more than 20 minutes late and did not engage with his presentation. He also recounts giving an online investor relations pitch from a karaoke booth after failing to find a quiet location. He concludes that founders should accept investment when it is offered, as such support can prove valuable later.
Lee states that his central mistake was failing to research government-backed funding programs. South Korean programs cited in the article include eligibility windows for startups founded within the past three or seven years, and the TIPS program, under which the government provides research and development funding when an investor contributes a set amount. Lee said he explored none of them. The decline of the virtual asset boom and the onset of COVID-19 then caused the investment market to freeze, and by the time he sought alternatives, the company had aged beyond eligibility for programs favorable to young firms.
Lee describes the period as difficult. He declined loan offers because he considered debt inappropriate for the company, and he said investor meetings were often unproductive, including one investor who arrived more than 20 minutes late and did not engage with his presentation. He also recounts giving an online investor relations pitch from a karaoke booth after failing to find a quiet location. He concludes that founders should accept investment when it is offered, as such support can prove valuable later.
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