Korea Technology Finance Corporation

Technology Appraisal

Overview of TA

KOTEC, Where Technology Appraisal service originated View

KOTEC, pioneer in Technology Appraisal Field

Ever since its foundation, KOTEC has continued its effort to establish a new paradigm in finance by trailblazing the unknown territory of the technology appraisal and sowing the seed of hope in the once-barren technology finance market. The technology financing in Korea was initiated by KOTEC in March of 1997, when it opened its Technology Appraisal Center, the first of its kind in Korea.

Now, the well-established technology appraisal service enables KOTEC to live up to its mission to play a pivotal role in enhancing the technological advance of the nation. As a public finance corporation, KOTEC is ready to serve as a reliable bridge connecting innovative SMEs with technology finance.

Definition of Technology Appraisal View

What is Technology Appraisal?

Technology appraisal refers to a systematic and in-depth assessment of the technology competence, marketability and commercial viability of technologies (intangible assets or intellectual properties, to be more specific) or technology projects. Evaluation results are then expressed in monetary value, ratings, scores and/or opinions. Usually the technology appraisal is undertaken as a part of underwriting process in reviewing SMEs' applications for financing supports.

Why Technology Appraisal?

In the era when the intangibles assets represent a majority of corporate value, it is impossible to judge operational risks of tech SMEs appropriately without knowing true revenue potential of the intangible assets held by them.

However, financing firms' understanding on the tech SMEs' technological factors is much limited. Due to this information asymmetry, innovative SMEs have difficulty in securing sufficient funding even when their growth potential is quite high.

Technology appraisal service of KOTEC addresses the problem of information asymmetry. Clear picture of clients' technological competence and future revenue potential enables financing firms to make informed decisions and embrace tech SMEs more positively. It can prevent prominent innovations from vanishing unnoticed and unharnessed, reducing the overall opportunity costs of R&D activities across the nation.

Technology Finance of KOTEC View

Technology Appraisal, Backbone of KOTEC's Technology Finance

The technology appraisal service of KOTEC lays a firm ground for its technology finance. Technology finance is a branch of finance that provides funding to companies on the basis of technologies.

In KOTEC, financing instruments such as loan guarantee are delivered based on the results of its technology appraisal. To put it another way, the technology finance of KOTEC is a field where its technology appraisal service and financing service is combined.

KOTEC's technology finance encourages tech SMEs utilize their technologies as a source of funding and also facilitates their access to financing to a great extent, which, in turn, boosts further technology innovations and technological advance of the nation.