If you have been living under a rock, there is a massive scandal happening in South Korea at the moment that has to do with the South Korean President Park Geun-Hye and her connection to Choi-Soon-Sil.  We will assume you already know the full backstory about the Choi scandal by now, so we will focus on how this scandal will impact South Korean startups.  Park Geun-Hye has strongly pushed for new and innovative startups in South Korea.  There have been many incubation centers that are government run which developed while Park was in office.  Park has been a major part of the push for new and innovative technologies and small business.  Ever since the scandal hit, many startups have been struggling since there are hundreds of startups that depend on the government’s support through funds and help in global marketing.


Park Geun-Hye has called for many new projects that centered around supporting Korean startups, whether it be free office spaces or creating fairs to attract overseas investments and most importantly funds.  However, now that Choi has been a major influence behind Park’s many decisions.  All of Park’s recent projects are called into question.  One of those projects is CEL which helps startups in the fields of computer game development, animation production, and webtoon creation.  News broke about a possible link between Choi and the CEL project.


Now all the startups associated with CEL are being looked at with a cloud of suspicion, fair or unfair.  Getting government support was looked upon as a success a month ago, now it is being looked at as a scandal because of Choi’s involvement.  So how exactly is Choi involved in CEL?

CEL was created by Cha Eun-Taek who is a former director of the Cultural Creation Conversion Headquarters.  Cha Eun-Taek is a very close friend to Choi.  Therefore Cha is now under suspicion with many wondering if Cha became the architect of the project just because Cha knew Choi.   With all these questions surrounding Choi’s involvement in these projects, there is great concern with Korean startups getting funding from the government and that state funding will be suspended or even worse, called off.  Especially projects that Cha or Choi might have been involved in.

The Minjoo Party of Korea has gone on record stating that they will suspend all budgets that are linked to Choi, which means all the Korean startups that are a part of the CEL program will lose their funding which is about $80 million this year and over $120 million the following year.


Startups have started to plan for the worst case scenario as many in the CEL program have started to look for new office spaces and started plans to raise funding.  This is terrible news for hundreds of Korean startups that did nothing wrong except apply for a government program.  Now they will be investigated to see if they have any connection with Choi.

With the news of the scandal now going global, this will be a huge program for global investments as South Korea is now considered too risky with the government in limbo with the Choi scandal.  South Korea was gaining momentum for global expansion and this breaking news will be a huge setback.  Many small Korean startups can not survive without the assistance from the government as well as foreign investors.  The future at the moment does not look good for many new Korean startups.

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