Decision-making for Investing Where No Seniors Dared | Park Young-ho of Laguna Investment

In 2010, six months into his VC career as a newcomer, he began considering investment in KakaoTalk as it approached 10 million users. By the time the investment was decided, it had reached 20 million users, and 5 billion KRW was invested at a company valuation of 200 billion KRW.

Before the Kakao investment, all major Korean VCs had passed on it. Despite zero revenue and a 14 billion KRW deficit, he judged that a messenger service meeting the platform conditions of “used by a wide range of people” and “used frequently” would definitely become a platform.

Messengers from large corporations (Naver, Daum, SK) were hampered by their existing PC user base and clung to multi-platform approaches, but Kakao, having nothing, won with the convenience of phone-number-only registration. Those who have nothing are at an advantage during transition periods.

The investment committee barely passed it with a score of 3.02 out of 5. Many seniors opposed it not because the deal was bad, but to advise that “a newcomer's career would end if they failed with a 5 billion KRW investment (equivalent to 20 billion KRW at the time)."

All 26 investment committees at Korea Investment Partners were passed. While seniors had rich experience in manufacturing and biotech, he gained trust because he had more experience in the internet and content sectors.

4:33, a company of 50 people, had its game 'Blade' ranked No. 1 in app store sales for 10 months, but while large corporations updated content every two weeks with 200-person teams, 4:33 could only update once every two months, leading to its decline. A small company could not sustain great fortune.

He considered Ginno Games (later PUBG) in 2013 but decided not to invest, judging that 'Devilian', then under development, would fail. His judgment was correct, but he missed the opportunity as he couldn't foresee that the same team would later create PUBG. A case where he should have looked at the people rather than the market.

Laguna Investment has now formed up to its 6th fund, and the majority of its LPs are not government agencies or financial institutions but venture founders and private companies. They provide substantial help with deal sourcing, mentoring, and M&A exit strategies, resulting in an exit track record of 50% IPOs and 50% M&As.

Out of 100 potential investee companies, only 2-3 are actually invested in. Over 90 companies are not worth investing in. Searching for “reasons not to invest” is easy and valueless. Junior VCs are instructed to find “reasons to invest” and always state their own opinion (for, against, or needs verification).

What's truly difficult is “doing things well.” What's easier is “doing things differently.” Doing things well requires many people, costs, and experts, but doing things differently can tolerate some deficiencies. Startups should do things differently; if they make choices everyone knows, they must do them well, which is difficult.