2,481 startup groups also concerned about the NewJeans situation ‘Who will invest if the notification is accepted?’
The Korea Startup Forum, a prominent business group with 2,481 startup companies as members, has expressed deep concern by issuing a statement regarding the termination of NewJeans’ exclusive contract. Photo courtesy of Adore
‘A case of unilaterally nullifying a contract, if this is tolerated, who will invest in a startup?’
Regarding the notice of termination of an exclusive contract with Newgenes, the largest startup organization in Korea has also drawn attention after expressing ‘deep concern.
The Korea Startup Forum (KOSPO), which has 2,481 domestic startup companies as members, defined the recent Newgenes situation as “a case of unilaterally nullifying a contract”, and warned that the resulting decline in trust will “damage the investment ecosystem” that ‘inetally’ must accompany the growth of startups, ultimately leading to a decline in domestic and foreign investment, which will have a negative impact of “limiting opportunities”in the industry as a whole.
In its statement, Cospo approached the exclusive relationship between its agency Adore and Newjins as an ‘investment contract’, and explained why the repercussions could be fatal to the entire startup industry.
Cospo specifically stated, “An investment contract goes beyond a simple monetary contribution and has the nature of a joint business that combines intangible assets such as opportunity costs, time, and shared vision,” and “If the interpretation and implementation of such a contract are unilaterally rendered ineffective, this will undermine the essence of investment decisions and lead to distrust that is difficult to restore throughout the investment ecosystem.”
In line with this, Cospo emphasized that it is true that ‘investment sentiment’ for entertainment has rapidly shrunk since this incident” and that “it cannot be anything but regrettable that this has happened at an important time when K-pop is expanding into the world”.
This is the first time that a ‘influential business group’ has spoken out regarding the termination of New Jeans‘ exclusive contract with her agency Adore. Previously, the ‘two major groups’ in domestic entertainment, the Korea Management Association and the Korea Entertainment Producers Association, also issued statements one after another, strongly criticizing the contract termination announcement and demanding New Jeans’ speedy return.
Reporter Heo Min-nyeong mignon@donga.com
