The Start of Managing Recurring Revenue with KPI…Crescendo Equity Partners' Sungmin Lee at Entrepreneurship Academy Lecture Series

On April 9, the first-semester Entrepreneurship Academy, organized by the Startup Institute (Director: Moon Jungbin) of the Business School (Dean: Kim Sang-yong), hosted its second lecture of the series with Sungmin Lee, Director of Crescendo Equity Partners, as the speaker. Sungmin Lee provided insights essential for startup entrepreneurship. 

First, he began by discussing the scale of startup investments in Korea in 2023. The total number of startup investments in the country was 1,429, a 36% decrease from the previous year (2,236). The investment amount saw an even steeper decline, dropping by 52.8% from 14.9 trillion KRW to approximately 7.03 trillion KRW. Sungmin Lee attributed this saying “There seems to be a significant reduction in late-stage investments, which typically involve larger amounts.” However, he encouraged early-stage startups by stating, "Despite the so-called startup winter, there are still ample opportunities for early-stage startups." 

He then presented specific figures related to investment items. Among the top 25 companies that received more than 10 investments in 2023, the highest number of investments was in the bio-medical sector. Second was game content, and then enterprise and security-related startups. The investment amounts reflected the same trend. Sungmin Lee advised, "Identifying where investment numbers and amounts are concentrated can help guide your startup endeavors." 

Next, he discussed investment regions. Last year, Seoul attracted the most investment, accounting for 66% of the total investment amount. He pointed out that “benefiting from the environment in Seoul can be advantageous,” emphasizing “not only physical access but also the importance of leveraging the network of startup entrepreneurs.” 

Lee offered extensive advice on securing Series A funding and shared his views on what private equity and late-stage investors consider important. He highlighted the concept of ‘recurring revenue,’ stating, “Late-stage investors highly value the visibility, predictability, and stability of revenue. Subscription services like Netflix and Coupang received significant investments because they demonstrated revenue predictability and stability even after 10 years.” He emphasized the importance of tracking KPIs as a tip for generating recurring revenue, saying, “Companies that effectively track KPIs are better at generating recurring revenue. This can maximize corporate value and attract more investments.” 

In conclusion, Sungmin Lee gave the following advice to aspiring entrepreneurs: “It’s okay to fall forward as long as you don’t fall backward,” “Focus on managing measurable indicators by paying attention to KPIs,” “Don’t rely solely on government projects,” and “Check the TAM (Total Addressable Market) to ensure you are in a growing industry.”