This study aims to propose a methodology for measuring a firm's knowledge management performance based on the dynamic aspect of knowledge—namely, the knowledge circulation process. The knowledge circulation process examined in this study refers to the cycle in which knowledge creation, accumulation, sharing, utilization, and learning are interconnected and circulate at the individual, departmental, or entire organizational level within a firm. Accordingly, as this knowledge circulation process continues, organizational knowledge will accumulate within the firm, and as a result, business performance will gradually improve. Expressed in functional form, this would take the shape of a typical S-curve, that is, a logistic curve. Therefore, this study represents the increase in organizational knowledge through the knowledge circulation process and the consequent improvement in business performance as a logistic curve, and based on this, proposes a knowledge management performance indicator called the KMPI (Knowledge Management Performance Index). The parameters constituting the KMPI are the five factors of the knowledge circulation process: knowledge creation, accumulation, sharing, utilization, and learning. To estimate these parameters, this study conducted a survey of 101 venture companies listed on KOSDAQ. The survey results were organized through factor analysis, and the relative weights for the five factors of the knowledge circulation process were derived and used for KMPI estimation. As a result, an appropriate KMPI could be calculated for each responding firm, and by analyzing the correlation between this value and various accounting and financial performance indicators of the corresponding firms, it was empirically demonstrated that the KMPI statistically significantly represents the firm's knowledge management performance.