Permalink : http://hdl.handle.net/2115/39871

KEYWORDS : VC;VC Investment;Japan Venture Capital Association;JVCA;University Spin Off;Technology Licensing Office;TLO

The first Japanese venture capital (VC) fund was formed in Kyoto. In 1972, businesses in Kyoto established Kyoto Enterprise Development Co., Ltd. (KED), which was dissolved in 1979. During the first boom from 1972 through 1974, Japan Associate Finance Cooperation (JAFCO) was established with the cooperation of Nomura Securities, Sanwa Bank and Nippon Life Insurance. JAFCO has since become the biggest and leading VC firm in Japan. The peak for investment came in 2000, roughly the same time when VC investment reached its height in the U.S. The total investment balance reached one trillion yen, meaning VC was clearly recognized as an industry. The Japanese Venture Capital Association (JVCA) was organized in 2002. Following a severe period in 2004, VC investment had recovered to the one trillion yen level by 2005. Unfortunately steady growth was derailed by the shock from the subprime housing loan problem in the United States in late 2008. VC firms in Japan looked to change their direction towards private equity, which seems to present medium risk but offers a good method to neutralize their portfolio. University spin-offs were backed by VC firms after 2000, but have decreased following the shock in 2008.