04 May Ep 17: Lessons from a serial VC in Japan – with Akira Kurabayashi
Financing plays a big role in the startup life. This is the oil in the business engine. Without capital, a company can hardly grow and move forward. For the past few years, I’ve witnessed a tremendous change of the venture capital (VC) landscape in Japan. It’s been growing at a fast pace and so I was curious to understand more about the status of VC in Japan and the way it operates.
Nobody could be more appropriate than my guest this week, Akira Kurabayashi, to talk about VC in Japan. Akira is a serial investor and has an impressive background. He served as a Director of the investment division at several big corporations like Mitsui Technology Investment Group, Globespan Capital Partners, and also Salesforce Ventures. More recently he joined as a Managing Director at Draper Nexus, a major US-Japan cross border investment firm.
I wanted to start with the basics. So I’m asking Akira to describe how a VC company works. How do they choose the companies to invest in. What are the main criteria influencing their decision process. And ultimately, what’s the definition of a successful investment.
Whenever we talk about startups, people tend to compare with what’s going on in the US. With investment experience in the American market, Akira also shares his views on the main differences with Japan. According to him, Japan’s startups focus essentially on the consumer market while in the US, the market is split equally with enterprise solutions. Furthermore, the entrepreneur crowd in Japan is pretty young in comparison and Akira really hopes to foster more business veterans in Japan.
We also talk extensively about the role of the board of directors. Should a VC become a board member, a board observer, or simply an advisor? It seems that more startups get reluctant to give away voting rights. And so, I’m asking Akira his views on when it makes sense to have investors seating at their board.
This episode really brings some tremendous insights about startups and financing from an investor’s point of view.
Questions: Should a VC seat at the board of directors? What should startups consider when choosing a VC (reply in the comments)
- (2:11) Presentation of Draper Nexus
- (5:34) What’s a successful investment
- (9:49) Main criteria to invest into startups
- (11:55) Investment process
- (15:03) VC differences between Japan and the US
- (18:36) What startups should look at when choosing a VC
- (22:28) Collaboration between VCs
- (24:51) Should VC seat at the board of directors?
- (28:52) Board observer vs. adviser
- (31:28) Japan startup scene
- (35:05) The best age to start a business
- (38:57) High potential sectors in Japan
- (40:37) Quick-fire questions
- Draper Nexus Ventures
- Draper Nexus on Draper Nexus Twitter
- Apps & software: Sansan / Money Forward
- Restaurant: Yakumo（八雲）
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