Venture capital in Japan and enlightenment to China

In business world, there have always been people willing to start business, and other people willing to back them and share the risks and rewards of enterprises, so in a sense there has always been entrepreneurship and venture capital (VC). Despite Japanese VC has gone through ups and downs, Japanese VC continues to lead Asia and is second only to U.S. Japanese government has recognized the economic benefits of fostering the creation and development of venture firms, and has applied themselves assiduously to the task of creating a supportive environment. This paper first provides some context for understanding the Japanese venture capital industry. Then it set forth an evolution of Japanese venture capital. The heart of the paper is devoted to a discussion of the key features of Japanese venture capital. This includes information concerning the size of the industry, the players, and the nature of the Japanese venture capital investment. This is followed by an analysis of some of the obstacles to a more vibrant Japanese venture capital industry which give us some enlightenment to Chinese venture capital development now. This paper also shows that relative to the US, the Japanese venture capital industry is a young, small industry, In another word, it shows that there is still a substantial room for further development, which makes VC still a promising industry in Japan.