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Venture Capitalist's Investment Decision Making in the New Technology Based Firms in Japan
... The form of intervention has evolved from a supply-side approach using tax incentives targeted at high net worth individuals, through an intermediationary approach aimed at improving the availability of information using capacity building and only currently, back to supply-side approach with the use of government funding to leverage private investment (Mason, 2010). Even though, Japan has been the focal point of Venture Capital (VC) activity in Asia for most of the last three decades (Kirihata, 2008;Hasegawa, 2004;Ajagbe and Ismail, 2014), China has suddenly been observed to have received increased attention in recent years. This is likely because it has developed majority of the needed components required for a vibrant VC industry, including robust economic growth, a growing commitment to IP rights, and a strong entrepreneurial culture (Ahlstrom et al., 2007;Zhang et al., 2011). ...
... Bank Supported Venture Capital: The banks in China were very active and played prominent role during the development of new ventures in the early years (White et al., 2005). Whereas in Japan the background of VCFs were set up as affiliates of financial institutions such as insurance companies, securities companies and commercial banks (Kirihata, 2008;. They were the primary source of financing to high tech start-ups. ...
... Instead, they relied on a project's designation as a recipient of Torch Program support as policy guidance. The majority of banks financing, however, was available only at the expansion and later stages of a venture's development (Kirihata, 2008;, with local governments acting as guarantors. ...
Technology entrepreneurship is a form of business leadership based on the process of recognizing high-potential, technology-intensive business opportunities, gathering resources such as talent and cash, and managing rapid growth using principled, real-time decision making skills. Technology based entrepreneurial firms account for a substantial number of essential inventions and innovations in successful countries. Such firms have become an integral part of the development of the global and regional economy. However, they are often characterized by the paradigms liability of newness and resource poverty, coupled with suffering from inadequate technical and marketing know-how, inexperience management, inability to discover initial financing and huge overheads. In view of this, startups in the technology sector encounter the problem of sourcing technical and financial resources and commercialization capabilities required to take their products to market. This study adopts a secondary approach to research methodology through the review of existing articles in this domain of investigation. Articles are sourced from conference and journal papers from reputable database, internet sources, brochures and newspapers. This study concludes that investment and financial decisions play an increasing vital role in economic growth and entrepreneurial new venture creation. Hence, investment and financial policies are part of the main operational resolutions in emerging nations to support investment by domestic firms, particularly technology entrepreneurial firms. Hence, policy makers in Nigeria and other developing countries could evolve ambitious policy framework aimed at developing the equity financing sector through venture capital, particularly for technology entrepreneurs. Also they could build substantial amount of skilled and experienced venture capitalists to identify high potential investments opportunities and be able to nurture and support them to an exit.
... O Venture Capital surgiu por volta da década de 1940 nos EUA, tendo iniciado as atividades, com investimentos de ex-executivos de empresas norte-americanas, que aplicavam recursos próprios e sua experiência profissional em empresas com alto potencial de crescimento (MEADE, 1977). No contexto Asiático, Latino-Americano e Europeu, a atividade iniciou entre as décadas de 1970de e 1980de (FELIX, 2005KIRIHATA, 2008). ...
... Para atingir este objetivo, realizou-se um estudo multicasos, com três dos principais fundos de Venture Capital brasileiros (FURTADO et al., 2008), utilizando como técnica de coleta de dados a aplicação de questionários estruturados, semi-estruturados e entrevistas. A abordagem do problema foi qualitativa e comparou os critérios utilizados pelos participantes, e aqueles reportados pela literatura internacional (MUZYKA et al., 1996;KINNUNEN, 2004;KIRIHATA, 2008). ...
... As finanças empreendedoras se diferenciam das finanças corporativas, no que diz respeito à assimetria informacional e aos problemas de agência, e nesse sentido as principais questões abordadas em pesquisas sobre VC/PE são: (i) alternativas de fontes de financiamento para as empresas alvo, (ii) a influência da governança e dos contratos na indústria de VC/PE, (iii) influência das políticas governamentais na indústria de VC/PE, (iv) o retorno obtido, dado o risco envolvido, nos investimentos em VC/PE, (v) o processo decisório dos gestores de Fundos de Venture Capital e Private Equity, (vi) os critérios utilizados para o processo de decisão (DENIS, 2004 (MUZYKA et al., 1996;KAPLAN;STROMBERG, 2000;FORLANI;MULLINS, 2000;MANIGART et al., 2002;SHEPHERD et al., 2003;ENS-LEY;CARR, 2006;DIMOV et al., 2007;KIRIHATA, 2008;KHANIN et al., 2008;MISHRA et al., 2009) ...
O presente trabalho buscou verificar quais os critérios utilizados pelos fundos de Venture Capital/Private Equity na decisão de investimentos. Para tal, realizou um estudo multicaso junto a três gestores de Fundos de Investimentos. A coleta de dados foi realizada através de questionários e entrevistas (estruturados e semiestruturados) no período de setembro de 2010 a Dezembro de 2010. Observou-se que os gestores dos casos estudados utilizam os seguintes critérios como os de maior impacto no processo de avaliação: a equipe de gestão e suas competências, o produto-mercado e os critérios do fundo, critérios esses apontados por Muzyka et al. (1996). Sobre esse resultado, cumpre ressaltar dois aspectos: (i) a preocupação com a capacidade de gestão é considerado pelos gestores como o critério mais relevante, por maximizar as chances dos projetos serem implementados; e (ii) os critérios do fundo, diferentemente do encontrado na pesquisa de Muzyka et al. (1996), não são subsidiários, o que provavelmente decorre da especialização e/ou regionalização da carteira de investimentos, além de aspectos da regulação brasileira, que estabelece limites para as empresas-alvo.
... This can be attributed to the VC market's lack of knowledge and experience in selecting portfolio firms as well as providing value-adding support to NTBFs. Japanese VCs put emphasis on experience rather than on the financial theories during the portfolio firm selection process (Kirihata, 2008a(Kirihata, , 2008b. During the post-investment period, Japanese VCs lack the knowledge and skill to provide value-adding support to NTBFs. ...
Purpose
The purpose of this paper is to discuss the implication of Japanese government venture capital (VC) policies for future research and to provide basis for policymakers and practitioners.
Design/methodology/approach
This is an academic literature review of available peer-reviewed publications on government VC policies. This paper discusses and analyses the current state and issues of the Japanese government VC policies regarding three research questions: What do Japanese government VCs do? Do they contribute to their portfolios? and Do they contribute to the development of VC market?
Findings
There are mainly two findings in this paper: It is effective to establish a complementary relationship with private VCs for Japanese government VCs to contribute to their portfolios; Japanese government should simultaneously continue to make and review policies for the VC market, the stock market, the entrepreneur sector and the environment surrounding them by its strategic long-term commitment to contribute to the development of VC market and new technology-based firms in Japan.
Originality/value
As there are only a few studies on recently strengthened Japanese government VC policies, this paper provides an in-depth discussion on these Japanese VC policies, which can be used for future research and as a valuable resource for policymakers and practitioners.
New Venture Creation: Entrepreneurship for the 21st Century, Canadian Edition, addresses the needs of upper-level entrepreneurship and new venture courses. Timmons provides strong, comprehensive theoretical coverage balanced with practical examples and cases, all designed to instruct students on how to formulate, plan for, finance, launch, manage, and eventually harvest a new venture. Timmons, Canadian Edition, is a rigorous, practical, and experiential text. The hands-on approach gets students thinking, planning, and ready to execute their own businesses. The text is practitioner-focused, features an especially rigorous section on financials, and focuses on high-growth, innovative ventures. Timmons covers the process of getting a new venture started, growing the venture, and successfully harvesting it. Through text, case studies, and hands-on exercises, this "how-to" text guides students in discovering the concepts of entrepreneurship and the competencies, skills, tools, and experience that will equip them to recognize entrepreneurial opportunities. Acknowledging that there is no substitute for actually starting a company, the Timmons authors believe it is possible to expose students to many of the vital issues and immerse them in key learning experiences that result in successful new venture creation.
The differences between the information used for the pre-investment valuation and the valuation methods used by venture capital investors in five countries (USA, UK, France, Belgium and Holland) are empirically studied. The analysis is based on postal questionnaire surveys of representative samples of senior venture capitalists in each country. Differences are found, which may be attributed to the dominant corporate governance mechanism or the level of development of the venture capital market. Between-country differences persist even after taking into account between-country differences in the relative importance of investment stages and venture capital types. Apparently similar systems and venture capital markets place varying emphases on different valuation methods, with theoretically ‘correct’ methods not always being preferred in practice. The findings of the study highlight the need for venture capital firms entering non-domestic markets to invest considerable effort in understanding the operation of these markets if they are to exploit fully their perceived competitive advantages and minimize the likelihood of repeating the problems experienced by venture capital entrants into foreign markets in the late 1980s.
This paper by the editors of Venture Capital has three objectives. First, it outlines the reasons why this is a particularly opportune time to launch a new journal on venture capital. Second, it sets out the aims of Venture Capital. Third, it provides an overview of venture capital research in order to 'map' the territory of the journal, describes its scope and highlights some aspects of venture capital where knowledge and understanding are limited.
Nihon no Bencha Kyapitaru (Venture capital in Japan)
- Yasuyuki Hamada
Hamada, Yasuyuki (1998) Nihon no Bencha Kyapitaru (Venture capital in Japan), Nihon Keizai
Shinbunsha (in Japanese).
Bencha Kyapitaru karamita Bencha Kigyo no Baryueshon(Venture capitalist's Valuation of firms)
- Hasegawa Hirokazu
Hasegawa Hirokazu(2004)Bencha Kyapitaru karamita Bencha Kigyo no Baryueshon(Venture capitalist's
Valuation of firms), Business Insight, pp.8-25 (in Japanese).
Kinyu-tyukai Kikan toshiteno Bencha Kyapitaru no Seiritsu to Tenkai(Emergence of Venture Capital as Financial Intermediary: Development of the Private Equity Market in the U.S)
- Nishizawa Akio
Nishizawa Akio(1998)Kinyu-tyukai Kikan toshiteno Bencha Kyapitaru no Seiritsu to Tenkai(Emergence
of Venture Capital as Financial Intermediary: Development of the Private Equity Market in the U.S),
Annual report of the Economic Society, 60(2), pp.163-183 (in Japanese).