[Edaily Marketin Reporter YunJi Kim ] Debt that starts at 12 billion won and increases by about 100 million won every month.

This is the personal debt shouldered by the founder of OGQ, South Korea’s largest intellectual property (IP) content startup, which had been planning an initial public offering (IPO) for the first half of next year. This is not money the CEO borrowed or spent personally. It is the amount accrued at an annual interest rate of 12% on 9 billion won that the company received as investment to acquire a specific firm and which remains in the corporate account to this day. It is a structure that is difficult to grasp at first glance, given that while the principal investment remains with the company, the responsibility for repayment has fallen on the CEO personally.

This was made possible by the “interested party” clause in the investment agreement. Although the contract does not use the term “joint and several guarantee,” it stipulates that if the acquisition falls through, the company and the interested party must repay the investment funds. The CEO understood that he could repay the debt using the funds remaining in the company’s account, but under the Commercial Act, the company could not arbitrarily return money that had been contributed as capital to a shareholder. The investor ultimately filed a lawsuit against the CEO personally, and the court recognized the repayment liability based on the wording of the contract.

The government has been gradually phasing out joint and several guarantees for founders to prevent startup failures from leading to personal bankruptcy. However, critics point out that contractual practices—such as the “interested party” clause—that effectively impose the same liability still persist.

Over 9 billion won held by the company

, plus interest… now

the CEO’s personal debt

According to the investment banking (IB) industry on the 20th, Shin Cheol-ho, CEO of OGQ, was ordered by the court to pay investors approximately 12 billion won in principal and interest. CEO Shin appealed the second-instance ruling, but the Supreme Court dismissed the appeal last April, making the judgment final.

This dispute originated from the 9 billion won in investment funds that OGQ raised in 2021 while pursuing the acquisition of Getty Images Korea. Even after the deal fell through, the company did not use the investment funds for other purposes but kept them in a corporate account, providing balance certificates to the investors—New Technology Business Finance Company B and Investment Specialist Group V—for several years.

When the acquisition fell through, the investors demanded the return of their investment funds in accordance with the contract. However, the investment funds, which had been contributed as company capital, could not be returned immediately like ordinary debt. This is because the company must satisfy requirements and procedures under the Commercial Act—such as having distributable profits—in order to acquire or cancel the investors’ shares.

According to CEO Shin’s social media posts, Article 18 of the investment agreement stipulates that if OGQ and “interested parties” do not proceed with the acquisition, the share purchase price must be refunded to the investors. CEO Shin was included as a party to the contract in his capacity as an “interested party.” CEO Shin maintains that, since the investment funds remained with the company, he believed the company would simply need to return them if the acquisition fell through. However, the investor filed a lawsuit against CEO Shin personally, rather than the company. While the company must follow procedures under the Commercial Act to return the investment funds, a final judgment against an individual allows for the enforcement of the judgment against his salary, real estate, and held shares.

OGQ and its existing shareholders sought a company-wide resolution through a selective capital reduction and a third-party sale. In December 2025, the OGQ board of directors resolved to acquire and cancel the investor’s preferred shares at the fair value determined by an external appraisal agency. However, according to information disclosed by CEO Shin on social media, the investor initially refused to cooperate with the process, demanding prior consent from all shareholders, and only expressed willingness to agree on June 18—after enforcement proceedings had already begun.

The third-party sale plan also fell through. Between June and July 2024, an affiliate of a listed company proposed to purchase the investor’s stake for 9 billion won in principal, but the investor rejected the offer on the grounds that it did not fully cover interest and litigation costs. According to CEO Shin’s side, although he stated in a court filing that he would transfer his shares upon repayment of the debt, a resolution through capital reduction or a third-party sale was not achieved for an extended period.

Creditors subsequently seized CEO Shin’s salary, severance pay, and real estate, and then initiated a special liquidation procedure targeting OGQ’s unlisted shares. CEO Shin argues that while approximately 12% of his holdings would be sufficient to cover the debt, depending on the method of enforcement, his entire controlling stake—about 32%—could be sold off. He stated, “I want to ask whether it is reasonable for the founder to face personal bankruptcy while the company’s investment funds remain intact,” adding, “Since the special liquidation process coincides with the critical period for the IPO, there is also a possibility that the creditor could directly acquire the company’s shares.”

VC Industry Speaks Out… “Need to Address Regulatory Loopholes”

As these facts have come to light, criticism has emerged from the venture capital (

VC

) industry. In particular, there is intense criticism that the exercise of investors’ rights could undermine the interests of the company and all shareholders, given that—aside from the legal right to recover debts—other shareholders may also bear the brunt of a decline in corporate value and instability in management control. Consequently, advice is mounting that founders should not only review investment terms but also verify in advance the reputation of the investment firm and how it has exercised its rights during past exit processes.

Kim Han-jun, CEO of Altos Ventures, stated on social media, “Founders should not skimp on legal fees and must thoroughly verify the reputation of potential investors,” adding, “They should speak not only with founders of companies that performed well but also with two or three founders of companies that did not.”

Another VC executive commented, “While I agree that they have the right to recover debts based on a final judgment, it’s hard to understand why shareholders would choose this approach if they truly want their portfolio companies to grow.” They added, “Unless there are other motives or a highly calculated decision behind it, I question what the real reason is.”

Some have pointed out that this case goes beyond how a specific investor exercises their rights and highlights a loophole in the current structure of investment agreements. Although the government has abolished joint and several guarantees for founders—primarily through policy-based financing—if the “stakeholder” clause in private investment agreements allows the full amount of the investment to be claimed from the representative as an individual, this is effectively no different from indirectly maintaining joint and several guarantees.

In this regard, Kim Hak-kyun, Chairman of the Korea Venture Capital Association, told Edaily, “I believe the association needs to investigate the extent to which founders are harmed by such loopholes,” adding, “Placing the burden on individuals runs counter to the very purpose of venture capital. We plan to ensure such issues are eliminated through repeated revisions.”

Meanwhile, CEO Shin views this matter as an issue concerning venture investment contract practices that goes beyond an individual contractual dispute and plans to file an official complaint with the Financial Services Commission, the Financial Supervisory Service, and the Ministry of SMEs and Startups.