Michael Korver speaks on venture capital in Japan

Venture capitalist, attorney and educator Michael Korver opened SPRIE's spring seminar series on new post-bubble patterns of entrepreneurship in Japan. Korver, a managing partner in Japan's Global Venture Capital, spoke on how he has seen venture capital evolve there in light of his own firm's experiences.

Korver argued that despite a number of problems surrounding the venture capital situation in Japan--a surplus of capital overwhelmingly from large entities in the financial services sector, low perceptions of entrepreneurial activity, and a lack of "high growth expectation" entrepreneurial activity--Tokyo offers a number of advantages to entrepreneurs, perhaps the most significant being Japan's early-adopter, high-consumption domestic market.

"Tokyo is... the perfect incubator for new businesses, ...but the Japanese leaders do not understand that the future of Japan... is absolutely dependent on creating entrepreneurial innovation."
-Michael Korver

He conceded that things have gotten worse since 2006: the backlash from the Livedoor/Takafumi Horie scandal and the resulting drop in the stock market, a 20% withholding tax on investment in Japan from foreign sources and the Ministry of Finance's regulation of industries that use limited partnerships like the venture capital industry have all added up to a drying-up of VC investments and a drop in IPOs in Japan.

Nonetheless, Korver will continue to have Tokyo as his base of operations. "Tokyo is... the perfect incubator for new businesses, ...but the Japanese leaders do not understand that the future of Japan... is absolutely dependent on creating entrepreneurial innovation."