Post-Investment Activities of Venture Capitalists When Making Investments in New Technology-Based Firms in Japan

Abstract

In Japan, there has been recent notable growth in the percentage of investments made by venture capitalists (VCists) in new technology-based firms (NTBFs) , as well as an increase in the active involvement of VCists in the management of their portfolio firms (PFFs) . On the basis of the results of a questionnaire survey, this paper examines the post-investment activities that Japanese VCists conduct for early stage and technology-based PFFs. The results of this study show that VCists who invest in early stage firms seem to be partially characterized by closer involvement with firms and the utilization of their own value-adding abilities. Furthermore, while it was observed that the more VCists tended to invest in early stage firms, the more they also invested in technology-based firms, it seemed that the value-adding abilities of these VCists that were necessary for the commercialization of technological innovation may still be at the developing stage.