EvolutionofJapaneseVentureCapital（一）.pdfVIP

Evolution of Japanese Venture Capital April 24, 2008 Michael Korver Managing Partner Global Venture Capital Some Observations • Both “high-growth expectation” entrepreneurial activity and VC funding levels in Japan are much lower than in the US (even when adj usted for population and size of economy). Also lower than in Europe. • According to the Global Entrepreneurship Monitor (GEM), Japan ranked second from last among high-income countries surveyed in terms of the prevalence rate of high- growth expectation early-stage entrepreneurship during 2000 – 2006. • Venture capital is available in Japan, but much of it comes from organizations affiliated with large financial institutions. • Most VC-backed companies in Japan target domestic market exclusively. According to GEM, Japan ranks last among high-income countries surveyed in terms of the prevalence rate of the international orientation of its entrepreneurial ventures. • According to GEM, Japanese have the lowest perceptions of the positive attributes about entrepreneurship activity in the world. • Japanese VC’s depend heavily on a handful of Japanese stock exchanges for exits (and performance) of their domestic portfolio companies. • Japan is a technologically sophisticated country with large domestic early-adopter markets and global companies generating significant amounts of technology innovation. What is the role of entrepreneurship and venture capital in driving this innovation? International Comparisons • U.S. venture capitalists invested $29.4B in 3,813 deals in 2007 – marking the highest yearly investment since 2001 (MoneyTree Report) • According to preliminary figures released by the EVCA, European venture capitalists invested € 11.5B in 2007 • Japanese VCs invested ¥2,800 hundred million in 2,773