Right after finishing my military service, I hadn't yet seriously considered my career path. One day, almost by accident, I joined a business club (SBA) and had a chance to meet a senior who had just finished his six-year journey at BCG. When he asked me what career I hoped for, I boldly answered, "I don't know yet." He paused for a moment, looked closely at me, and said, "You have the face of a VC." I had no idea what that meant, but intrigued, I started researching it thoroughly. That's how I first got fascinated by venture capital, wondering how I might find a way to work in this appealing field.

The venture capital scene in the United States, arguably the birthplace of VC investing, has clear, standardized paths. Roughly half are former Wall Street professionals, and the other half are founders-turned-investors. Given my non-technical, humanities-based background, starting a company seemed out of reach. Thus, I chose finance as my route into VC, landing my first internship at a private equity-like firm, Equis Development. Naturally, I became deeply interested in private equity as well, frequently visiting financial news sites like The Bell. However, I soon realized that the skill set required for effective venture investing is quite distinct from what makes an effective investment analyst in IB or PE. After all, forecasting financial statements doesn't exactly align with what early-stage startups need.

Private equity typically invests in companies already generating profits, using valuation discounts, leveraged buyouts, and operational improvements post-investment. PE investments are fundamentally driven by current financial performance and stability, making them essentially value-based.

In contrast, venture capital bets on future potential. The startup might currently have zero customers, zero revenue, or perhaps even no fully formed team. However, if there's a clearly defined problem, a fresh approach to solving it, and a deeply committed founder, a VC can still invest. To me, the essence of venture capital lies precisely in transforming something previously seen as unprofitable into something valuable. It's not simply about risk-taking; it’s about finding meaning in the vision and logic that justify that risk.

But lately, I feel that the VC industry is becoming increasingly similar to private equity.

In recent venture markets, VCs are increasingly emphasizing returns, proven business models, and predictable follow-on financing. Several factors contribute to this trend, but I mainly see three:

First, the inflation of fund size (AUM inflation). Just ten years ago, a 10 billion won fund (~$10 million) was considered large. Today, venture funds commonly manage hundreds of billions or even over a trillion won. With larger funds, ticket sizes inevitably grow, pushing VCs toward investing in more proven, later-stage companies with clearer follow-on funding prospects. Fund size inflation doesn't merely shift investment targets; it transforms how VC firms operate entirely. Larger funds require greater liquidity and more predictable exit strategies, prompting firms like Lightspeed Venture Partners to register as RIAs (Registered Investment Advisers), adopting secondary investments, continuation funds, and roll-up strategies. These methods are more characteristic of PE than traditional venture capital.

Second, there's a trend of deal sourcing becoming increasingly financialized. As professionals from IB and PE backgrounds enter VC, investment analysis and data-driven evaluations intensify. While this trend has positives, excessive reliance on quantitative analysis can sideline fundamental aspects like founder insights or unique problem-solving approaches. With RIA registration enabling investments across a wider spectrum, including secondary market transactions and structured asset deals, narrative-driven early-stage investments inevitably diminish.

Lastly, there’s increased active management toward exit strategies. Many VCs now follow a clear path from equity investment to operational involvement, then guiding subsequent financing rounds toward IPO or acquisition. Though VCs might not explicitly take control, they are increasingly influencing founders' decisions and shaping exit strategies, sometimes directly intervening in operations. For instance, General Catalyst, a prominent U.S. VC, recently acquired Ohio-based hospital chain Summa Health, actively restructuring its operational model. Though termed "mission-driven investing," this resembles PE’s hands-on management approach.

I believe venture capitalists should be among the first responders to problems the world throws into the open. Yet, as the market grows, VCs are increasingly using automatic filters based on revenue, total addressable market (TAM), or daily active users (DAU). Consequently, startups must now speak the language of PE to attract investment, diluting VC's original purpose. While adopting PE strategies like Lightspeed or General Catalyst might enhance exit opportunities and strategic flexibility, it simultaneously reduces investment in teams that haven't yet begun, founders without products, and fundamentally important but seemingly irrational ideas. Yet, I believe VC should always play the role of first supporter for such seemingly irrational market opportunities.

PE identifies and refines "already good businesses." VC, however, discovers businesses before they even become businesses. VC doesn't analyze whether something is already successful; it imagines, constructs, and nurtures future potential. In that sense, VC isn't just a supplier of capital—it's a rare mechanism capable of pointing toward a market direction before it even emerges. This is why I'm concerned about venture funds gradually adopting PE characteristics. Although I understand the pressure for stable returns, I worry this trend dilutes VC's unique role. Thus, I wish for VC to remain authentically itself in three key areas:

First, I hope fund sizes don't grow excessively. Larger funds naturally focus on larger ticket sizes, decreasing their willingness or ability to invest in truly early-stage companies.

Second, VCs should not pursue control of the companies they invest in. Investors increasingly acquire large stakes or even dominate boards, shifting power away from founders. Prominent VC firms like Founders Fund explicitly avoid managerial interference, acknowledging that the strongest teams don't thrive under such pressures.

Third, I want to reconsider the reliance on the criterion of predictable follow-on rounds. Excessive emphasis on immediate revenues or assured subsequent funding inevitably filters out genuine early-stage ventures with groundbreaking yet unproven ideas.

If I ever run my own fund, I hope to become the kind of investor who responds with capital even to untested, unconventional ideas—as long as their possibility genuinely convinces me. My investment philosophy will stand on three core principles:

1. Courage to invest without existing customers or immediate revenue. Truly early-stage investors should back teams based solely on their problem definition, insight, and commitment.
2. Reducing obsession with immediate market size predictions. Rather than precise current TAM calculations, I prefer understanding why a market should exist, why existing solutions fail, and why a team's insights matter.
3. Smaller AUM and higher density. Managing smaller funds allows deeper involvement with each portfolio company, nurturing genuine partnerships rather than mere financial relationships.

Yes, LPs expect returns. But more critical than simply the size of returns is how those returns are generated—the quality and repeatability of investment success. LPs increasingly seek venture funds for their unique potential for outsized, asymmetric returns. Venture capital inherently offers a "right-tail upside" that PE-style structures typically can't match. Prominent early-stage funds like First Round Capital, Uncork Capital, or Initialized manage relatively small AUMs and consistently deliver exceptional returns. These funds maintain a strong identity as true early-stage investors, and their LPs fully understand and support that vision.

Startups inherently take risks, and when that risk stems not merely from uncertainty about growth but because "no one has tried this before," I believe those are precisely the risks we must support. True VC shouldn't merely pursue predictable profits but should channel capital toward possibilities that could reshape entire markets.

VC is one of the few capital forms capable of responding boldly to questions the world hasn't yet answered. I hope VC reclaims its original spirit—as investors who extend a helping hand precisely when founders feel most alone. Our role is to ensure capital flows not only into ventures that clearly promise financial returns but into ideas and solutions that fundamentally need to succeed, even if their profitability initially appears uncertain. I believe that's how VC re-energizes the broader social engine: by enabling courage, promoting truly transformative ideas, and never forgetting that the world still needs genuine ventures.

Best,

Bosung