Startups and Venture Capital in Japan: How to Grow

The startup ecosystem in Japan has seen gradual growth, supported by the government’s recent "Startup Development Five-Year Plan" and a significant interest from overseas venture capital.
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Volume/Issue: Volume 2024 Issue 027
Publication date: July 2024
ISBN: 9798400280610
$15.00
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Topics covered in this book

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Finance , Labor , Development - Economic Development , Inequality , labor market duality , wage gap , fiscal transfers , funding affect startup performance , startup ecosystem , helps startup , startup financing , TengTeng xu , Self-employment , Initial public offering , Development strategy , Global

Summary

The startup ecosystem in Japan has seen gradual growth, supported by the government’s recent "Startup Development Five-Year Plan" and a significant interest from overseas venture capital. This paper lays out the startup financing ecosystem in Japan, with comparison to international peers, and studies potential drivers of startup financing and their relevance for startups’ performance. The results, based on country-level aggregate analysis, underscore the critical role of firm dynamism and entrepreneurship in supporting capital investment and firm valuations. Further analyses at the firm level suggest that equity funding helps startups innovate, grow, and successfully exit. Moreover, the impact of funding on the likelihood of a successful exit appears to be higher in cultures that seem to reward risk taking.