Understanding Startup Investment Contracts from the Other Side

– Entrepreneurship Academy Lecture by Attorney Joongil Cho 

The Entrepreneurship Academy lecture hosted by the Korea University Business School Startup ㄴStation was held on Tuesday, May 13, in the KOLON Lecture Room (Room B307) of Hyundai Motor Hall. The lecture, titled “Startup Investment Contracts – Understanding from the Other Side,” was delivered by Joongil Cho, a partner attorney at SHIN & KIM LLC and an expert in corporate law and transaction structure design. He also serves as a member of the Venture and Startup Legal Support Special Committee of the Korean Bar Association. 

The lecture was based on real-life advisory cases, focusing on the key aspects of investment contract structures that entrepreneurs must understand and how to approach contracts from an investor’s perspective. “Why is the investor asking for this clause? You must be able to ask yourself that question.” said Cho, emphasizing throughout his talk that understanding ‘the investor’s logic’ is the foundation of any negotiation. 

He cited common clauses frequently found in investment contracts—such as △non-compete agreements, △stock option restrictions, △limitations on the issuance of new shares, and △mandatory dividend provisions—emphasizing that “understanding the structure and underlying logic of the contract is more important than the specific wording.” 

Cho also pointed out that “When founders are overly focused on securing investment, they tend to overlook important details,” and stressed the importance of thorough due diligence prior to signing. He advised entrepreneurs to examine whether △trade secrets are sufficiently protected, △the terms violate any existing agreements, △the founder is being exposed to excessive personal liability, and △the investor’s commitment to the deal is genuine. 

Drawing on his extensive advisory experience—from M&A cases involving major Korean platform companies such as Kakao, Netmarble, and NAVER to early-stage startups like SEMIFIVE and B GARAGE—Cho outlined common pitfalls that founding teams often overlook in investment contracts. He concluded the lecture by emphasizing, “It’s critical to clearly and convincingly communicate to investors what you want—and why you need it.” 

A student currently preparing to launch a startup shared their thoughts, saying, “It was a valuable opportunity to revisit the contract process from the investor’s perspective, rather than solely from the standpoint of a startup.” The student added, “It gave me a clearer sense of which elements need to be negotiated in real investment discussions.” 

The Entrepreneurship Academy is a special lecture series planned and operated by the Startup Institute of Korea University Business School. It aims to provide aspiring and early-stage entrepreneurs with practical insights by inviting seasoned founders and industry experts with hands-on experience. 

Korea University Business School will continue to support the growth of student entrepreneurs and enhance its connection with the startup ecosystem through a variety of ongoing programs.