The Cultivation of New Technology-Based Firms and Roles of Venture Capital Firms in Japan

Abstract

In this paper, I analyze post-investment activities of venture capital firms (VCFs) based on a questionnaire survey and discuss the issues and challenges of post-investment activities of VCFs with new technology based firms (NTBFs) in Japan. The questionnaire survey reveals that business supports desired by NTBFs can be classified into four groups."business strategies adjustment and motivation", "business advice and networking", "finance and crisis management", and "recruitment assistance". The questionnaire found that the business support most needed by NTBFs is "business strategies adjustment and motivation", followed by assistance in "business advice and networking", "recruitment assistance", and, lastly, "finance and crisis management". On the other hand, the actual support most provided by VCFs is "business advice and networking", followed by supports in terms of "finance and crisis management", "business strategies adjustment and motivation", and "recruitment assistance". In Japan, there is a low percentage of VCFs engaging in post-investment activities involving recruitment assistance. Providing supports in recruitment activities may be an effective way for VCFs to differentiate their support services for NTBFs. To contribute to the growth of NTBFs in Japan, it seems important to provide a support environment for recruitment assistance.