Against the background of urgent and intense global innovation, Japan is actively building a vibrant innovation ecosystem by relying on its investment in technology accumulation and government strategic support. As a major country in technological innovation, Japan not only has world-leading R&D capabilities, but also provides diversified innovation funding channels, providing fertile soil for companies to make technological breakthroughs and market expansion. For enterprises, obtaining appropriate innovation funds is not only the key to achieving technological breakthroughs, but also a necessary condition to maintain a leading position in a competitive market. Whether it is promoting cutting-edge technology research and development or promoting the upgrading of traditional industries, sufficient financial support will inject strong innovation power into enterprises, accelerate commercialization progress, and enhance market competitiveness.

This guide aims to provide a comprehensive and practical guide to applying for innovation funds for entrepreneurs who are interested in pioneering innovative businesses in Japan. We will introduce Japan’s innovation funding system in detail, including government subsidies and venture capital. At the same time, this guide provides application process analysis, strategic suggestions and case analysis to help readers better grasp Japan’s innovation opportunities. Whether you are focusing on enterprises or established companies, whether you are focusing on artificial intelligence, biotech, clean energy or other innovative fields, this guide will reveal Japan’s rich sources of innovation funding and provide practical application strategies and suggestions. Our goal is to help you find the most suitable financial support in Japan, a fertile ground for innovation full of opportunities, realize your innovation dreams, and promote the sustainable and healthy development of your enterprise.

Overview of Japan’s innovation funds

Japan’s innovation funding ecosystem is a stalwart, rich system that provides diverse government financing options for businesses of all types. This system mainly includes several main types of funds, private venture capital, corporate venture capital, crowdfunding platforms and bank loans. Each endpoint type has its own unique characteristics and applicable scenarios.

Government funding is an important driver in Japan’s innovation ecosystem, mainly provided by national government agencies and specialized science and technology innovation promotion agencies. The Ministry of Economy, Trade and Industry, the Ministry of Education, Culture, Sports, Science and Technology, the Japan Science and Technology Agency (JST) and the New Energy Industrial Technology Development Organization (NEDO) support the development and foundation of national strategic industries through grants, commissioned research fees or low-interest loans. Technology research. The application process for such funds is more complicated, but the amount is usually increased, and the social efficiency and technological innovation level of the project are secondarily required.

Private venture capital plays an increasingly important role in Japan’s innovation ecosystem. Independent venture capital firms such as JAFCO and Global Brain, as well as technology company-affiliated venture capital firms such as SoftBank Vision Fund, provide strategies and strategies for carrot companies with high growth potential. These venture capital firms usually have an investment cycle of 5-7 years and provide management experience in addition to funds. , industry resources and network support, investment decisions are faster, but the requirements for corporate valuation and growth potential are higher.

Corporate Venture Capital (CVC) is an investment arm established by large companies, such as Toyota AI Ventures and Panasonic Open Innovation Fund. They invest in innovative companies that are related to their core businesses or have strategic benign effects. CVC’s investment decisions usually consider strategic benignness. They can be invested in companies to provide industry expertise and market channels, the investment life cycle, and the requirements for the company’s development stage are relatively flexible.

With the popularization of the Internet, crowdfunding has become an important channel for Japanese innovative companies, especially consumer-oriented products and services, to obtain early funding. Platforms such as Makuake, Campfire and Ready For provide financing opportunities for different types of projects. Financing has the characteristics of low capital cost and can achieve the dual purposes of financing and marketing at the same time, but the scale of funds is usually small and suitable for early-stage projects or small innovations.

Although traditional banks provide a relatively high proportion of loans to innovative companies, the Japanese government has pushed banks to provide more support to innovative companies in recent years. Policy financial institutions such as the Japan Policy Finance Corporation have provided entrepreneurial support loans, and some commercial banks have also launched specialized loan products for specific enterprises. This type of financing review process is relatively strict, but the interest rate is low. It is suitable for growth-stage companies with stable profits and will not increase equity.

By understanding these different types of innovative funding sources, companies can choose the most suitable financing channels based on their development stage, industry characteristics and financing needs. In actual operations, many successful innovative companies often adopt encouraged financing strategies and comprehensively utilize different types of funding sources to achieve optimal funding structures and development paths. Entrepreneurs should fully understand the characteristics of various financing options and develop appropriate financing strategies based on their own circumstances to promote their companies to thrive in Japan, a fertile ground for innovation.

Application for government innovation funds

2.1 Main sources of government funds

The Japanese government has established a number of important funding sources to support innovation and technological development. Among them, the Ministry of Economy, Trade and Industry, the Ministry of Education, Culture, Sports, Science and Technology, the Japan Science and Technology Agency (JST) and the New Energy, Industrial and Technology Development Organization (NEDO) are the four most important fund providers.

As the formulator and executor of Japan’s industrial policies, the Ministry of Economy, Trade and Industry has provided a number of innovation support funds for enterprises. The most famous ones include the “Strategic Basic Technology Advancement Support Project” and the “Regional Future-Driven Enterprise Support Project.” These projects aim to enhance the international competitiveness of Japanese industries, with support covering all stages from basic research to commercialization. Companies applying for these projects need to demonstrate their potential for technological innovation and their contribution to Japan’s industrial development.

The Ministry of Education, Culture, Sports, Science and Technology mainly focuses on supporting basic research and academic innovation. Its “Research Funding Project (Research Funding)” is one of the largest competitive funds in Japan, mainly for universities and research institutions. However, companies can also participate in these projects by partnering with academic institutions. In addition, the Ministry of Education, Culture, Sports, Science and Technology also has projects such as the “Industry-Academic Joint Research and Promotion Program (OPERA)” to encourage industry-university cooperation and provide companies with opportunities to cooperate with top scholars.

The Japan Science and Technology Agency (JST) is an important bridge connecting academic research and industrial application. JST’s “Research Results Maximization Program (A-STEP)” is a phased support project that provides comprehensive financial support from basic research to industrialization. For enterprises, participating in the JST project can not only obtain financial support, but also gain access to the most cutting-edge scientific research results, which is conducive to improving their own innovation capabilities.

The New Energy Industrial Technology Development Organization (NEDO) focuses on energy and industrial technology innovation. NEDO’s projects are usually large-scale and involve areas such as renewable energy, energy-saving technology, and smart social systems. Its “Research and Development Type Support Project” specifically targets innovative small and medium-sized enterprises and startups, providing full-process support from technology development to commercialization. Companies applying for the NEDO project need to demonstrate the innovation and market potential of their technology, while also taking into account the project’s contribution to Japan’s energy strategy and industrial policy.

2.2 Detailed explanation of application process

The application process for government innovation funds usually includes four main stages: qualification review, project proposal, review process, and results announcement and fund disbursement.

Eligibility review is the first step in the application process. Each funding project has its own specific application eligibility requirements, which may include company size, establishment time, research and development capabilities, financial status, etc. For example, some NEDO projects may require the applicant company to have specific patents or technology reserves. Therefore, companies should carefully read the program guidelines before applying to ensure that they meet all eligibility requirements. Some projects also have a pre-review mechanism, and companies can submit preliminary plans and obtain official feedback before formal application.

The project proposal is the most critical part of the entire application process. An excellent project proposal should include detailed technical solutions, market analysis, expected results, team introduction, fund use plan, etc. Taking JST’s A-STEP project as an example, applicants need to clearly explain their technological innovation points, comparison with existing technologies, expected socio-economic benefits, etc. The proposal should be written in accordance with the official templates and guidelines to ensure complete content, clear logic, and accurate data.

The review process usually includes two stages: preliminary review and review. The preliminary review is mainly a formal review and preliminary technical assessment of the application materials, and is conducted by staff of the project office and some experts. Projects that pass the initial review will enter the review phase, which usually involves in-depth review by a committee of experts and sometimes includes an on-site defense. For example, some large-scale projects of the Ministry of Economy, Trade and Industry will require applicant companies to make on-site presentations and answer questions from experts. The evaluation criteria usually include technological innovation, market prospects, team capabilities, rationality of financial plans and other aspects.

Publication of results and disbursement of funds are the final stages of the application process. Project review results are usually announced on the official website and applicants are notified directly. Funded projects need to sign a formal agreement with the funding agency to clarify the rights and obligations of both parties, project implementation plans, fund use regulations, etc. Funds are usually released in installments and are linked to project progress. For example, some of NEDO’s projects will divide funds into three parts: start-up funds, mid-term funds and closing funds. Enterprises need to reach corresponding milestones before they can obtain subsequent funds.

2.3 Application tips and precautions

Writing a competitive application is key to securing government innovation funding. First, applicants should study the program guidelines in depth to accurately grasp the funder’s intentions and priorities. For example, if you apply for a project from the Ministry of Economy, Trade and Industry, you should emphasize the contribution of technological innovation to industrial upgrading and international competitiveness; while when applying for a JST project, you need to highlight the potential for transformation and application of basic research results. Secondly, the application should be complete with detailed data and sufficient arguments. Using specific market data, technical indicators, patent information, etc. to support your arguments will greatly enhance the persuasiveness of your application. Furthermore, clear project planning and reasonable fund use plans are also important factors for a successful application. It is recommended that enterprises develop detailed project milestones and assessment indicators, and closely integrate the use of funds with the goals of each stage.

During the application process, companies should also pay attention to avoid some common misunderstandings. The first is that the application preparation time is underestimated, resulting in hasty preparation of materials. It is recommended that enterprises start preparing application materials at least 1-2 months in advance and allow sufficient time for repeated revision and improvement. Secondly, communication with relevant departments was ignored. Many funding projects provide consulting services. Taking the initiative to communicate with project leaders can better understand the application requirements and improve the relevance of the application. The other is to over-exaggerate the project effects or technical level. Most of the review experts are veterans in the industry. They must not use false or exaggerated descriptions, which may cause the credibility of the entire application to be questioned.

It is recommended that applicants make full use of industry-university-research cooperation resources . Cooperation with universities or research institutions can not only enhance technical strength, but also improve the credibility of the application. Focus on demonstrating team strength. In addition to technical capabilities, the team’s execution capabilities and past performance should also be emphasized. Do a good job in intellectual property layout. Possessing core patents or unique technologies is often an important bargaining chip to obtain funding. Applicants should also pay attention to the government’s industrial policy orientation and integrate the project with national strategic needs, which can often greatly increase the chance of successful application.

To sum up, applying for Japanese government innovation funds is a systematic task that requires companies to work hard on understanding policies, preparing materials, and formulating strategies. Through careful preparation and strategic application, companies will have greater opportunities to obtain these valuable innovation resources and promote their own technological innovation and business development.

Venture investment application

3.1 Introduction to Japan’s major venture capital institutions

Japan’s venture capital ecosystem has been booming in recent years, with the emergence of a number of highly influential venture capital institutions. These institutions not only provide financial support to innovative enterprises, but also bring valuable industry resources and management experience.

JAFCO (Japan Asia Investment Co., Ltd.), as the largest independent venture capital company in Japan, was established in 1973 and plays a pivotal role in the Japanese venture capital industry. JAFCO’s investment areas cover a wide range of high-tech fields, ranging from IT, biotechnology to new materials. It is characterized by strong financial strength and a wide span of investment stages, with participation from the seed round to the later stages. JAFCO is not only active in Japan, but also has branches in other Asian countries and regions, providing convenience for the internationalization of Japanese startups.

Global Brain is another high-profile Japanese venture capital firm founded in 1998 and known for its professional vision in the Internet and IT fields. Global Brain’s investment strategy focuses on cross-border innovation, with a special focus on entrepreneurial projects that can use new technologies to subvert traditional industries. The company also actively promotes the connection between Japanese startups and overseas markets and helps invested companies expand their international business.

Although SoftBank Vision Fund is a global investment fund, its Japanese background and influence in the Japanese market cannot be ignored. This giant fund founded by SoftBank Group mainly invests in cutting-edge technology fields such as artificial intelligence and the Internet of Things. Its investment scale is usually large and suitable for companies in the growth stage. SoftBank Vision Fund’s investments often bring significant brand effects and global resources to the invested companies.

In addition to these large venture capital institutions, Japan also has many small and medium-sized venture capital firms that focus on specific fields or stages. For example, Coral Capital focuses on early-stage technology startup projects; Spiral Ventures has made great achievements in the B2B SaaS field. Although relatively small, these agencies tend to provide more personalized and in-depth support.

3.2 Venture capital application process

The venture capital application process usually includes five key stages: initial contact, business plan submission, due diligence, investment negotiation and transaction completion. Understanding this process can help entrepreneurs better prepare and seize investment opportunities.

The initial contact stage is the first step for entrepreneurs to establish contact with venture capital institutions. In Japan, interpersonal networks (いわゆる”コネ”) play an important role in business society, so introductions through reliable intermediaries can often increase the chances of gaining venture capital attention. In addition, participating in entrepreneurial competitions, industry exhibitions or roadshows organized by venture capital institutions are also effective contact channels. At this stage, entrepreneurs need to prepare a concise and powerful project introduction (often called “エレベーターピッチ”), using 3-5 minutes to clearly convey the core business concept and competitive advantages.

Submission of the business plan is the beginning of the formal application. Japanese venture capital institutions generally pay more attention to details, so the business plan should be comprehensive and in-depth. An excellent business plan usually includes company overview, product or service introduction, market analysis, competitive strategy, financial forecast, team background, etc. It is particularly important to note that Japanese venture capital attaches great importance to the stability and execution of the team, so when introducing the team, the professional background, past achievements and teamwork experience of the members should be highlighted. In addition, considering the particularity of the Japanese market, how to localize products or services is also an integral part of the plan.

Due diligence is the most critical part of the venture capital decision-making process. Due diligence by Japanese VCs is often very detailed and can last weeks or even months. At this stage, VCs will conduct an in-depth review of all aspects of the company, including technical feasibility, market potential, financial status, legal compliance, etc. Entrepreneurs need to prepare detailed documentation, such as financial statements, customer contracts, patent certificates, etc. At the same time, venture capital investors may conduct on-site inspections of the company’s operations and conduct in-depth communications with core team members. During this process, it is crucial to maintain a transparent and honest attitude, as any concealment or false information may lead to the termination of the investment transaction.

The investment negotiation stage mainly revolves around investment terms. This includes investment amount, equity ratio, company valuation, investor rights, etc. Japanese VCs are usually conservative in negotiations and tend to set up multi-round, small-scale investment plans to reduce risks. Another Japanese characteristic is that venture capital may require a higher degree of involvement in the company’s operations, such as posting directors or consultants. At this stage, entrepreneurs need to balance the company’s development needs and investors’ demands, not only to obtain sufficient financial support, but also to maintain effective control of the company. It is recommended to hire an experienced lawyer to assist in negotiations to ensure that the terms are fair and reasonable.

Closing the transaction is the final stage of the entire application process. This includes steps such as signing a formal investment agreement, completing legal procedures, and receiving funds. In Japan, the process can be more cumbersome than in other countries, involving the preparation of multiple legal documents and approvals from government agencies. After the transaction is completed, entrepreneurs need to adapt to the new corporate governance structure, regularly report the company’s operations to investors, and solicit investors’ opinions on major decisions. Maintaining good investor relations is crucial to the long-term development of the company.

3.3 How to attract venture capital attention

In a highly competitive entrepreneurial environment, how to effectively attract the attention of venture capital is a challenge faced by every entrepreneur. The following discusses strategies to enhance the attractiveness of entrepreneurial projects from three aspects: business model optimization, team building and market positioning.

Business model optimization is the core of attracting venture capital. Japanese venture capital generally values ​​business models that can solve practical problems and are scalable. Entrepreneurs should clearly define their value proposition, that is, how their products or services meet market needs and solve user pain points. At the same time, it is necessary to build a sustainable profit model and clarify revenue sources and cost structures. In the Japanese market, business models that can combine local characteristics are often more popular, such as Japan’s aging population, high-tech applications and other social characteristics. In addition, Japanese venture capital is increasingly paying attention to projects with globalization potential. Therefore, when designing business models, it is also a plus to consider future international expansion strategies.

Team building is another focus of venture capital evaluation. Japanese corporate culture emphasizes teamwork and long-term stability, so it is crucial to form a core team with complementary capabilities and close cooperation. The ideal entrepreneurial team should include professionals from different backgrounds such as technology, marketing, and finance. It is particularly noteworthy that Japanese venture capital attaches great importance to the leadership and industry experience of founders. If the founding team lacks certain key capabilities, consider inviting industry experts to join the advisory board to enhance the overall strength of the team. At the same time, it is also important to demonstrate the team’s learning ability and adaptability, as this reflects the company’s ability to respond to market changes.

The accuracy of market positioning directly affects the investment attractiveness of the project. Although the Japanese market is sizable, competition is also fierce, so clear market positioning and differentiation strategies are particularly important. Entrepreneurs need to conduct in-depth research on the target market, including market size, growth trends, competitive landscape, etc. Especially in Japan, consumers have extremely high requirements for product quality and service experience, so when positioning in the market, full consideration must be given to how to meet these high standards. Another strategy is to look for underexplored market segments or emerging areas, such as aged care technology, sustainability solutions, etc. At the same time, formulating a clear market entry strategy and expansion plan to demonstrate the project’s growth potential is crucial to attracting venture capital.

In general, attracting the attention of venture capital requires entrepreneurs to improve the competitiveness of their projects in all aspects. Optimize the business model to show the feasibility and profitability of the project, build a strong team to ensure execution, and accurately position the market to highlight the unique value of the project. When communicating with VCs, entrepreneurs should communicate these advantages clearly and confidently while remaining open and honest to lay a good foundation for possible collaboration.

Corporate venture capital application

4.1 Japan’s major corporate venture capital funds

Japanese Corporate Venture Capital (CVC) has shown a booming trend in recent years and has become an important force in promoting the development of Japan’s innovation ecosystem. Many large Japanese companies have recognized the importance of promoting innovation through the establishment of venture capital funds, which can not only bring new technologies and business models to the parent company, but also maintain a competitive advantage in a rapidly changing market.

Toyota AI Ventures, the venture capital fund of Toyota Motor Corporation, is a leader among Japanese CVCs. The fund was established in 2017 with an initial scale of US$100 million. It mainly focuses on areas closely related to the future development of the automotive industry such as artificial intelligence, robotics, and autonomous driving. Toyota AI Ventures not only provides financial support to start-up companies, but also uses Toyota’s global resource network to help invested companies accelerate technology development and market expansion. The fund’s investment strategy reflects the forward-thinking thinking of large Japanese companies in the face of industrial change, supplementing internal R&D with external innovation.

SoftBank Ventures Asia, owned by SoftBank Group, is another Japanese CVC worth watching. Although its investment scope spans Asia, it also has an important presence in the domestic market of Japan. The fund focuses on new generation information technology, such as artificial intelligence, big data, Internet of Things and other fields. SoftBank Ventures Asia is unique in its flexible investment strategy, which allows it to make small early-stage investments as well as participate in large-scale later-stage financings. This flexibility enables it to support innovative companies at different stages of development and make full use of SoftBank Group’s global resource advantages.

Hitachi Ventures of Hitachi Manufacturing represents the transformation efforts of Japan’s traditional manufacturing giant. The fund focuses on industrial Internet of Things, digital transformation, smart manufacturing and other fields, and aims to promote Hitachi Group’s business innovation by investing in emerging technologies. Hitachi Ventures’ investment philosophy emphasizes synergies with invested companies, and usually seeks innovative projects that can complement Hitachi’s existing businesses or promote transformation.

In addition to these large CVCs, many medium-sized companies are also actively investing in venture capital. For example, NTT DoCoMo Ventures of Japanese telecom giant NTT DoCoMo focuses on communication-related technologies such as 5G and the Internet of Things; Rakuten Capital of Rakuten, a leading Japanese e-commerce company, focuses on financial technology and e-commerce innovation. The existence of these CVCs has enriched Japan’s venture capital ecosystem and provided diversified financing options for startups in different fields and stages.

4.2 Characteristics and application strategies of corporate venture capital

Compared with traditional venture capital, corporate venture capital has distinct characteristics, which determines that entrepreneurs need to adopt different strategies when applying. Understanding these characteristics and developing a corresponding application strategy is crucial to successfully obtaining support from corporate venture capital.

Corporate venture capital usually has clear strategic goals. Investment decisions not only consider financial returns, but also focus on strategic synergy with the parent company’s business. For example, Toyota’s CVC will prioritize projects that can promote innovation in the automotive industry. Therefore, entrepreneurs should conduct in-depth research on the parent company’s business of the target CVC when applying and clearly explain how their project can bring strategic value to it. This may include technology complementarity, market expansion, supply chain optimization, etc. In the business plan, in addition to conventional market analysis and financial forecasts, a special chapter should be added to analyze the synergy effects with the parent company.

Corporate venture capital can often provide more non-financial support, such as industry expertise, market channels, technical resources, etc. This means that entrepreneurs must not only consider funding needs when applying, but also consider how to use the resources of the large companies behind CVC to accelerate their own development. When communicating with CVC, you can proactively inquire about possible support in addition to funds and propose specific cooperation ideas. For example, if you are applying for Hitachi’s CVC, you can explore how to use Hitachi’s global sales network to promote your products.

The decision-making cycle for corporate venture capital is typically longer than for traditional venture capital, and the approval process may be more complex. This is because CVC’s investment decisions often need to consider the strategic opinions of the parent company and may involve the evaluation of multiple departments. Entrepreneurs need to be mentally prepared for this and be more patient in scheduling. At the same time, this also means there are more opportunities for in-depth communication and adjustment of plans during the application process. It is recommended to proactively follow up after the initial contact, provide regular updates on project progress, and maintain continuous interaction with CVC.

Corporate venture capital may pay more attention to the maturity and commercialization potential of technology. Compared with early-stage venture capital, CVC generally prefers to invest in projects that already have a clear business model and have even begun to generate revenue. Therefore, the feasibility and market verification results of the technology should be highlighted when applying. If possible, preparing a detailed product demo or proof-of-concept (POC) report will greatly increase your chances of securing investment.

Based on these characteristics, entrepreneurs can adopt the following strategies when applying for corporate venture capital: first, conduct in-depth research on the target CVC and its parent company, and tailor the business plan to highlight strategic synergy; second, prepare a detailed list of resource requirements, explaining in addition The support you hope to receive in addition to funds; thirdly, formulate a long-term communication plan and maintain continuous interaction with CVC; finally, focus on demonstrating the technical maturity and commercialization progress of the project, and use data and facts to speak for itself.

4.3 Analysis of pros and cons of cooperation with corporate venture capital

Working with a corporate venture capital (CVC) can bring significant advantages to startups, but it also comes with potential risks and challenges. An in-depth understanding of these pros and cons can help entrepreneurs make smarter financing decisions and better grasp opportunities and avoid risks during cooperation.

The advantages of cooperation are first reflected in resource acquisition. CVC is usually backed by a strong parent company, which can provide startups with valuable industry resources. This includes professional technical knowledge, mature sales channels, a broad customer base, and accumulated experience in specific fields. For example, if an artificial intelligence start-up company obtains investment from Toyota CVC, it may have access to Toyota’s cutting-edge research in the field of autonomous driving, or use Toyota’s supply chain network to reduce production costs. These resources are critical for startups to grow quickly and establish a competitive advantage.

Secondly, CVC investment often brings brand endorsement effect to startup companies. Obtaining investment from CVC, a well-known large enterprise, can greatly enhance the market credibility of a startup company and help attract customers, partners and even other investors. This endorsement effect is particularly obvious in the Japanese market, because Japanese business culture attaches great importance to relationships and credibility between companies.

By cooperating with CVC, startups have the opportunity to deeply understand the operating models and needs of large enterprises, which has important guiding significance for product development and market positioning. For example, through cooperation with Hitachi CVC, an enterprise software startup may better understand the IT needs of large manufacturing companies, thereby optimizing product functions and improving market adaptability.

There are also some potential risks and challenges when working with CVC. The first is the potential conflict of strategic objectives. CVC investment decisions are often influenced by the parent company’s strategy, which may lead to sudden changes in investment focus or interference in the development direction of startups. For example, if the parent company changes its technical route, it may affect CVC’s support for startups in related fields.

Working with a CVC may involve a certain loss of autonomy. Large businesses may demand more control or participation in decision-making, which may limit a startup’s flexibility. Especially in Japan, the hierarchical concepts and decision-making processes in large corporate culture may conflict with the rapid decision-making model of startups.

Overreliance on a single CVC may bring risks. If a startup’s business is overly dependent on the resources or market of the CVC parent company, once this relationship changes, it may have a significant impact on the startup.

Partnering with a CVC may impact future financing or M&A opportunities. Other investors or potential acquirers may have concerns about a startup’s close relationship with a particular conglomerate, which may affect the company’s independence or relationships with other partners.

Considering these pros and cons, entrepreneurs should adopt the following strategies when choosing to cooperate with CVC: First, clearly assess whether CVC’s investment goals are consistent with the company’s long-term development plan; second, clearly define the rights and responsibilities of both parties in the cooperation agreement to protect the company’s core interests and decision-making autonomy; thirdly, maintain diversified resources and partners to avoid over-reliance on a single CVC; finally, establish an effective communication mechanism to ensure good information exchange with CVC and its parent company, and adjust cooperation strategies in a timely manner.

Through prudent evaluation and strategic cooperation, startups can maximize the strategic value brought by CVC, while effectively managing potential risks and achieving mutually beneficial partnerships.

Crowdfunding

5.1 Introduction to Japan’s major crowdfunding platforms

As an emerging financing method, crowdfunding has developed rapidly in Japan in recent years, providing a new source of funds for entrepreneurs and small and medium-sized enterprises. Japan’s crowdfunding market has its own unique characteristics, reflecting the culture and consumption habits of Japanese society. Understanding Japan’s major crowdfunding platforms is crucial for businesses and individuals planning to crowdfund in Japan.

Makuake is one of the most well-known crowdfunding platforms in Japan. It was founded in 2013 and is part of the CyberAgent Group. Makuake is unique in its emphasis on innovative products and services. The platform is not only a funding channel, but also a place for product testing and market validation. Many Japanese companies, including some large ones, will choose to release new product prototypes on Makuake and gauge market response through crowdfunding campaigns. Makuake’s user base is dominated by young early adopters who have a strong interest in novel and innovative products. The platform’s success stories include numerous technology products, design merchandise and local specialty foods. Makuake also provides comprehensive project support services, including marketing advice, media exposure, etc., making it the crowdfunding platform of choice for many entrepreneurs.

Campfire is another popular crowdfunding platform in Japan. Compared with Makuake, Campfire’s project types are more diversified, covering art, music, film, social welfare and other fields. Campfire is characterized by its flexible funding model, including All-or-Nothing (funding will be collected only when the target is reached) and Keep-it-All (funding will be received regardless of whether the target is met). This flexibility makes Campfire particularly suitable for small and personal projects. In addition, Campfire also provides a feature called “Fanclub” that allows creators to establish a subscription-based supporter community to provide a stable source of funding for ongoing projects.

ReadyFor is Japan’s first crowdfunding platform, established in 2011. The uniqueness of ReadyFor lies in its strong sense of social responsibility, and there are a large number of public welfare and social innovation projects on the platform. ReadyFor is particularly popular with non-profit organizations and social entrepreneurs. The platform not only provides fund-raising channels, but also actively connects project sponsors with various social resources, including professional volunteers, media reports, etc. ReadyFor’s success stories include multiple post-disaster reconstruction projects, educational innovation programs and environmental initiatives.

COUNTDOWN is an equity crowdfunding platform that provides startups with a channel to raise funds directly from the public. Unlike other return-based crowdfunding platforms, COUNTDOWN allows investors to participate in the long-term development of the company by purchasing shares. This model is particularly suitable for start-ups that have long-term growth plans but may have difficulty obtaining traditional venture capital. COUNTDOWN investors usually pay more attention to the company’s business model and growth potential, rather than just specific products or services.

GREEN FUNDING by T-SITE is a crowdfunding platform operated by TSUTAYA, a large Japanese retail group. The platform leverages TSUTAYA’s vast offline store network and membership base to provide unique exposure opportunities for crowdfunding projects. GREEN FUNDING is particularly suitable for projects related to culture, entertainment, and lifestyle. These fields are highly consistent with TSUTAYA’s main business. One of the great advantages of this platform is its ability to combine online crowdfunding with offline experiences, such as displaying prototypes of crowdfunded products in the TSUTAYA bookstore.

Understanding the features and benefits of these platforms is crucial to choosing the right crowdfunding channel. Entrepreneurs and project sponsors need to choose the most suitable platform based on the nature of their project, target audience and financial needs. At the same time, we should also pay attention to the fee structure, success rate and user group characteristics of different platforms to develop the most effective crowdfunding strategy.

5.2 Crowdfunding campaign planning and execution

A successful crowdfunding campaign requires careful planning and effective execution. When conducting crowdfunding in the Japanese market, you also need to consider the characteristics and cultural factors of Japanese consumers. A comprehensive crowdfunding campaign planning should include the following key links:

The first is goal setting and platform selection. Set reasonable crowdfunding goals based on the nature of the project and funding requirements. Goals need to be challenging enough to inspire supporters to participate, but realistic enough to avoid coming across as unrealistic. When selecting a platform, in addition to considering the characteristics of each platform mentioned above, you must also evaluate whether the user group of the platform matches the target audience of the project. For example, if it is a technology product for young people, Makuake may be a better choice; and if it is a social welfare project, ReadyFor may be more suitable.

Project page design and content production are key to successful crowdfunding. Japanese consumers generally pay attention to details and quality, so project presentations need to be comprehensive and detailed. High-quality images and videos are essential, not only to showcase the core values ​​of the product or project, but also to embody the sophistication and beauty that Japanese consumers value. In your written description, clearly state what makes your project unique and the problem it solves. For technological products, detailed technical specifications and usage scenario descriptions are important; for cultural or public welfare projects, it is necessary to emphasize their social significance and influence.

Reward setting is an important means of attracting supporters. Japanese consumers generally have a high interest in limited edition and special edition products, so consider setting up some unique rewards that are only available to crowdfunding backers. At the same time, the price gradient of rewards must be reasonable, with both low-threshold options suitable for ordinary supporters and high-value rewards for deep supporters. In Japan, reward methods that combine online crowdfunding with offline experiences are also popular, such as inviting supporters to participate in the product development process or holding meet-and-greets.

Marketing strategy is crucial to the success of your crowdfunding campaign. In Japan, social media marketing requires special attention to platform selection. Twitter is very popular in Japan and is an important channel for disseminating information. LINE, as the most widely used instant messaging tool in Japan, can also be considered for building a community of supporters. In addition, cooperation with local Japanese Internet celebrities (いわゆる”インフルエンサー”) is also an effective way to promote. When it comes to marketing content, Japanese consumers usually prefer soft and euphemistic expressions, and overly direct or exaggerated publicity may cause resentment.

Communication and updates during the crowdfunding process are also key success factors. Japanese consumers generally expect a high level of customer service, so prompt responses to inquiries and regular updates on project progress are essential. In the updated content, you can include interesting anecdotes from the product development process, introductions of team members, etc., which can help increase the participation and trust of supporters. If you encounter delays or problems, communicate honestly and clearly explain the solution. In Japan, a sincere apology and detailed explanation can often gain understanding and tolerance from supporters.

Execution after the crowdfunding ends is equally important. Fulfilling promises in a timely manner and ensuring the quality of products or services is not only related to the success of current projects, but also affects future credibility. In Japan, product packaging and delivery experience are also important factors for consumers to judge quality, so more attention should be paid to these details.

Finally, building long-term relationships is also one of the goals of crowdfunding campaigns. You can consider establishing a community of supporters to continue sharing project progress, and even invite supporters to participate in future product development discussions. This practice not only builds loyal supporters for future crowdfunding projects, but also helps gain valuable market feedback.

5.3 Analysis of successful crowdfunding cases

Analyzing successful crowdfunding cases can provide valuable experience and inspiration for future projects. Below we will discuss in detail several crowdfunding cases that have achieved significant success in the Japanese market, analyze their success factors, and summarize the experience that can be used for reference.

The first case is the “ZUUM” electric scooter project on the Makuake platform. This project raised more than 100 million yen in 2019, setting a fundraising record for the Makuake platform at the time. ZUUM’s success is mainly due to the following factors: First, the product itself is carefully designed to meet the needs of Japanese urban commuters. Its lightweight and foldable features are very suitable for Japan’s crowded public transportation environment. Secondly, the project team provided detailed technical descriptions and usage scenario displays on the crowdfunding page, satisfying Japanese consumers’ thirst for product information. Thirdly, the project has set up rewards at multiple price levels, including early bird discounts and limited edition models, effectively stimulating early support. Finally, the project team collaborated with multiple technology bloggers to conduct extensive social media promotions to expand the project’s influence. ZUUM’s success shows that in the Japanese market, innovative products that combine local needs, coupled with effective information dissemination and marketing strategies, can obtain an enthusiastic response from consumers.

The second case comes from the ReadyFor platform, which is a public welfare project called “Rescuing Abandoned Animals”. Although the amount raised by this project is not as high as some commercial projects, its over 200% completion rate and extensive social influence make it a model for public welfare crowdfunding. The success of the project can be attributed to the following points: First, the project theme is in line with Japanese society’s growing concern for animal welfare. Secondly, the project team effectively aroused public sympathy through real and touching stories and high-quality pictures and videos. Thirdly, the project has set up a variety of participation methods, including not only financial donations, but also volunteer recruitment, etc., which lowers the threshold for participation. Finally, the project was reported by many local media, greatly increasing its visibility. This case shows that in Japan, public welfare projects that touch people’s hearts can often gain widespread support if they can provide clear information and diverse participation methods.

The third case is a cultural project on the Campfire platform that aims to recreate the traditional Japanese craft “Edo Kiriko” (Edo Kiriko). Not only did the project successfully raise funds, it also developed into a sustainable business model after the project ended. The key to its success is: first, the project cleverly combines traditional craftsmanship with modern design to create products that have both cultural heritage and modern aesthetics. Secondly, the project team invited supporters to participate in the design process, which enhanced the sense of participation and uniqueness. Thirdly, the project takes advantage of the Japanese people’s emphasis on the protection of their country’s cultural heritage and emphasizes the significance of cultural inheritance in marketing. Finally, the project continued to interact with supporters after the crowdfunding ended, holding regular workshops and demonstrations, and established a stable customer base. This case shows that in the Japanese market, projects that combine cultural elements with modern needs tend to be well-received, and that ongoing customer interaction is critical to a project’s long-term success.

By analyzing these cases, we can summarize some key success factors for crowdfunding in the Japanese market: first, deeply understand and design products or projects according to the needs and preferences of Japanese consumers; second, provide detailed and transparent information to meet the needs of Japanese consumers. Consumers pay attention to quality and details; thirdly, develop diversified participation methods and reward settings to attract different types of supporters; finally, focus on continuous interaction with supporters and establish long-term relationships. These factors not only contribute to the success of your crowdfunding campaign but also set the stage for the long-term development of your project or product.

When planning crowdfunding activities in the Japanese market, entrepreneurs and project sponsors should fully consider these factors and develop targeted strategies based on the characteristics of their own projects. At the same time, we must also pay attention to the particularities of the Japanese market, such as consumers’ high requirements for product quality, high expectations for services, and their emphasis on cultural and social values. With careful planning and execution, coupled with a deep understanding of the Japanese market, the chances of a crowdfunding project being successful in Japan will be greatly increased.

Bank loans

6.1 Innovative loan products of major Japanese banks

The Japanese banking industry has faced challenges such as a low interest rate environment and an aging population in recent years. In order to maintain competitiveness and meet changing market demands, major banks have launched innovative loan products. These products not only reflect the characteristics of Japan’s financial market, but also reflect the bank’s in-depth understanding of the needs of different customer groups.

Mitsubishi UFJ Bank, one of the largest banks in Japan, has launched “Quick Business Loans” (スピードビジネスローン) for small and medium-sized enterprises. The characteristic of this product is that the application process is completely online, using artificial intelligence technology for credit assessment, and approval can be completed in as little as 24 hours. This product is particularly suitable for small businesses and entrepreneurs who need quick financing. Loan amounts range from 1 million yen to 50 million yen, and the repayment period can be up to 7 years. This fast and convenient loan method greatly simplifies the traditional loan process and provides small and medium-sized enterprises with more flexible financing options.

Mizuho Bank has launched a “green loan” (グリーンローン) for environmental protection projects. This product is specially designed for companies committed to environmental protection and sustainable development. The interest rate of the loan will fluctuate based on the environmental performance of the borrowing company. The better the environmental performance, the lower the interest rate. This not only encourages companies to invest in environmental protection, but also reflects the bank’s responsibility in promoting sustainable social development. The scope of green loans includes renewable energy projects, energy efficiency improvement projects, clean transportation projects, etc. This innovative lending model reflects the Japanese financial industry’s growing emphasis on environmental, social and governance (ESG) factors.

Sumitomo Mitsui Banking Corporation has launched the “Future Innovation Loan” (Future Innovation Loan) for emerging technology companies. What is unique about this product is that it not only provides financial support, but also includes a series of supporting services. For example, banks will provide business consulting, market expansion advice, and even help connect potential business partners and investors to lending companies. Loan evaluation not only considers the financial status of the enterprise, but also evaluates its technological innovation capabilities and market potential. This comprehensive support package is particularly suitable for innovative businesses that have advanced technology but may lack commercial experience.

As a bank with a large network, Japan Post Bank has launched “lifestyle loans” (ライフプランローン) for individuals. This product features customized loan solutions based on different stages and needs of an individual’s life. For example, we provide low-start, long-term loans for young people who have just entered the workplace; for families with children, we provide comprehensive loans that include education expenses. This loan product fully takes into account the demographic changes in Japanese society and the financial needs of different age groups, and reflects the bank’s comprehensive consideration of the life cycle of individual customers.

Rakuten Bank, as an Internet bank, has launched “AI Credit Loan”. This product relies entirely on artificial intelligence technology for risk assessment and credit review, and does not require traditional income proof or guarantees. The system will analyze the applicant’s online shopping history, credit card usage, social media activities and other multi-dimensional data to assess credit risk. This innovative assessment method makes financing opportunities available to groups that may have difficulty obtaining traditional bank loans (such as freelancers, online store owners, etc.).

These innovative loan products reflect the efforts of the Japanese banking industry in responding to market changes and meeting diversified needs. They not only simplify the loan process and improve efficiency, but also provide customers with more comprehensive and personalized financial solutions by integrating multiple services, introducing new technologies, and focusing on social responsibility. For businesses and individuals seeking financing in Japan, understanding these innovative products can help them find the financing channels that best suit their needs.

6.2 Loan application process and required materials

Applying for a bank loan in Japan, whether for an individual or a business, requires a series of strict review procedures. Understanding the process and preparing the required materials are critical to increasing your chances of success with your loan application. While there may be slight differences between banks and different types of loan products, the overall process and key material requirements are generally similar.

The loan application process usually begins with an initial consultation. Applicants can choose to visit a bank branch or proceed through the bank’s online platform. Many Japanese banks now offer online appointment systems, allowing customers to choose a suitable time for an interview or video conference with a loan advisor. At this stage, the bank will understand the applicant’s basic situation, loan purpose and approximate amount. This is also a good opportunity for applicants to learn about the various loan products and conditions. The bank may suggest the most suitable loan type based on its initial understanding of the situation.

Next comes the formal application stage. Applicants need to fill in a detailed application form and provide personal or company information. For personal loans, the materials usually required include: identity documents (such as residence card, passport), proof of income (such as source receipts, confirmation declaration), proof of residence (such as resident’s certificate), bank statements (usually the last 3 -6 months record). If you are applying for a loan to purchase a house, you will also need to provide documents related to the property, such as an overview of the property (property overview) and a purchase and sale deed (sales contract).

For business loans, the required materials are more complex. Usually includes: a copy of the company registration book (certificate of company registration), a deposit (Articles of Association), financial statements for the past three years (financial statements, including loan and debit statements, profit and loss calculations and owner capital and other changes calculations), corporate tax returns (Corporate income tax return), business plan (business plan), representative’s personal assets documentation (documents related to the personal assets of the company representative), etc. If it is a new start-up, you may also need to provide a detailed business plan and market analysis report.

After submitting the application and required materials, the bank will conduct a detailed review. This process typically includes a credit check, financial analysis and risk assessment. For personal loans, banks will check personal credit reports to assess the applicant’s income status and repayment ability. For corporate loans, banks will analyze the company’s financial status, cash flow, industry prospects, etc. This stage can take 1-2 weeks, sometimes longer.

If the bank requires additional information or has questions, it will contact the applicant for additional clarification. At this stage, the applicant should keep the phone open and respond to the bank’s inquiries in a timely manner. Sometimes the bank may request an interview to learn more about the situation.

After approval, the bank will propose a loan proposal, including loan amount, interest rate, term and repayment method and other conditions. Applicants need to review these conditions carefully and, if they agree, sign the loan contract. In some cases, especially for larger loans, a guarantee or collateral may be required.

The last step is the lending stage. After signing all the necessary documents, the bank will transfer the loan amount to the designated account. The entire process, from application to disbursement, may take anywhere from 2 weeks to 2 months, depending on the type and amount of the loan.

It’s worth noting that Japan’s loan application process is very detail-oriented and accurate. All submitted documents must be true and accurate; any false information may result in the application being rejected or even facing legal risks. At the same time, Japanese banks attach great importance to customers’ credit history, so maintaining a good credit record is crucial to successfully obtaining a loan.

6.3 Tips to improve loan approval rate

When applying for a bank loan in Japan, knowing how to improve your approval rate can greatly increase your chances of success. Here are some practical tips and strategies that can help applicants better prepare their loan applications and increase their likelihood of approval.

Maintaining a good credit history is crucial. In Japan, the credit information of individuals and enterprises is mainly managed by institutions such as the Japan Credit Information Agency (JICC), the National Bank Personal Credit Information Center (KSC), and the Credit Information Center (CIC). It’s important to check your credit report regularly to make sure there are no errors or negative entries. If any inaccurate information is discovered, the relevant authorities should be contacted immediately for correction. At the same time, maintaining the habit of on-time repayments, including credit card bills, utility bills, etc., will help establish a good credit record.

Choosing the right loan product and bank is very important. Different banks may have different specialties and target customer segments. For example, some banks may be more focused on small and medium-sized enterprise loans, while others are more focused on personal home loans. Researching the products of different banks and choosing the loan type and bank that best suits your situation can increase the probability of a successful application. Also, consider using your main bank to apply for a loan, as banks usually have a more comprehensive understanding of existing customers and may be able to offer more favorable terms.

Preparing a detailed and persuasive application package is another key point. For personal loans, in addition to the basic income certificate, if you have other sources of income (such as investment income, rent income, etc.), you should also provide proof. For corporate loans, in addition to financial statements, a detailed business plan should also be prepared, including market analysis, competitive advantages, future development plans, etc. This additional information can help banks more fully assess an applicant’s ability to repay and the feasibility of the project.

Planning and applying ahead of time is also an effective strategy. Don’t wait until you need funds urgently to start applying for a loan. Planning ahead not only gives you enough time to prepare the required materials, but also allows you to apply when your financial situation is optimal. For example, it is much easier for a business to apply for a loan when its financial statements show good performance than when it encounters temporary difficulties.

Leveraging a guarantee or collateral can also significantly increase approval rates. For personal loans, consider using real estate, securities, etc. as collateral. For business loans, in addition to company assets, sometimes banks will also accept personal guarantees. However, it should be noted that although providing guarantees or mortgages can increase the approval rate, it also increases risks, so it needs to be carefully considered.

It’s also important to build a good relationship with your bank. This is not limited to when applying for a loan. You should maintain good communication with the bank at ordinary times. Regularly updating the financial status of the company or individual, taking the initiative to introduce business developments to the bank, and participating in customer activities organized by the bank will help build a trusting relationship. When it comes time to apply for a loan, banks already have a deep understanding of the applicant, which can speed up the review process and increase the likelihood of approval.

For new businesses or individuals applying for a loan for the first time, it is also a good idea to consider applying for a small loan first to establish your credit history. Successfully repaying a small loan can prove your creditworthiness and lay the foundation for applying for a larger loan in the future.

Finally, if you have difficulty obtaining a loan directly from a bank, you may consider other auxiliary methods. For example, take advantage of the government-backed SME financing guarantee system or seek support from venture capital funds. These alternatives can increase access to capital and may also help improve bank loan approval rates.

Overall, improving your loan approval rate requires thorough preparation and long-term effort. It involves not only well-prepared application materials, but also day-to-day financial management, credit maintenance and building a good relationship with your bank. By adopting these strategies, applicants can greatly increase the success rate of obtaining bank loans in Japan and provide necessary financial support for the development of individuals or businesses.

Special considerations for multinational enterprises and entrepreneurs

7.1 Visa and legal issues

For multinational companies and entrepreneurs, the first thing they need to solve when doing business in Japan is visa and legal issues. These issues are not only related to whether individuals can legally reside and work in Japan, but also directly affect whether companies can operate smoothly in Japan. Therefore, having an in-depth understanding of Japan’s relevant laws and regulations and being fully prepared in advance are crucial to successfully conducting business in Japan.

In terms of visas, Japan offers a variety of visa types suitable for business people and entrepreneurs. The most common of these is the “Business Management” visa, which is suitable for foreigners who start a company or serve as a company executive in Japan. Applying for this type of visa requires meeting a series of conditions, including company registered capital, office space, business plan, etc. For start-up enterprises, the Japanese government has also launched the “Entrepreneurship Visa”, which allows foreign entrepreneurs to obtain a 6-month residence permit under certain conditions to prepare for starting a business. In addition, there is a “Technical, Humanistic Knowledge, International Business” visa, which is suitable for professionals working in Japanese companies.

It is worth noting that Japan’s visa policy has been adjusted in recent years. In order to attract high-quality talents, it has launched a “highly specialized occupation” visa. This kind of visa is scored based on the applicant’s academic qualifications, professional experience, annual income and other factors. Applicants who reach a certain score can get more benefits, such as a longer period of stay, easier access to permanent residence, etc. For multinational executives and entrepreneurs, understanding and taking advantage of these new policies can provide favorable conditions for long-term development in Japan.

In terms of legal issues, the first thing to note is the company registration process. The process of registering a company in Japan is relatively complex and involves multiple government departments. It is usually necessary to prepare company articles of association, certificate of registered capital, office space lease contract and other documents, and register them with the Legal Affairs Bureau. For foreign companies, it is also necessary to designate a representative director who resides in Japan. In addition, Japanese corporate law requires companies to submit regular financial reports and tax returns, so it is very necessary to hire professionals who are familiar with Japanese legal and accounting systems to assist in handling these matters.

Employment law is another area that requires special attention. Japan’s labor regulations are very strict and protect employees’ rights and interests very strongly. For example, dismissal of employees requires just cause and complicated procedures; additional wages are required for overtime work; employees are entitled to paid annual leave, etc. It is crucial for multinational companies to understand these regulations and formulate personnel policies that comply with Japanese law, otherwise they may face labor disputes and legal risks.

Intellectual property protection is also an important legal issue that multinational companies and entrepreneurs need to pay attention to. Japan has a comprehensive patent, trademark and copyright protection system, but the application procedures and protection strategies may be different from other countries. For example, Japan adopts the “first to file” principle, that is, whoever applies for a patent first has the rights, rather than who invents it first. Therefore, it is very important to apply for intellectual property protection in Japan in a timely manner to protect corporate interests.

In addition, Japan’s antitrust laws, consumer protection laws, environmental laws, etc. may also have a significant impact on corporate operations. For example, Japan’s Personal Information Protection Act has strict regulations on the collection and use of personal information by companies, and violations may result in huge fines and reputational damage. Therefore, multinational enterprises need to fully understand these laws and ensure that their business operations comply with relevant regulations.

Handling visa and legal issues requires expertise and experience. For multinational companies and entrepreneurs, it is wise to hire lawyers and administrative scriveners (similar to notaries in the United States) who are familiar with Japanese law. These professionals can not only assist with specific matters such as visa applications and company registration, but also provide valuable advice on Japan’s legal environment, helping companies avoid legal risks and lay a solid legal foundation for long-term development in Japan.

7.2 Cultural differences and communication skills

When doing business in Japan, understanding and adapting to cultural differences and mastering effective communication skills are crucial to the success of multinational companies and entrepreneurs. Japan’s unique business culture and social etiquette may be significantly different from those of many countries. If these differences cannot be correctly understood and dealt with, it is likely to lead to misunderstandings and even affect the establishment and maintenance of business relationships.

Japanese business culture places a high value on etiquette and hierarchy. In business situations, it is very important to use honorifics (honorific language) correctly. The Japanese honorific system is complex, including respect (the other person’s behavior), humility (one’s own behavior), and politeness (general expressions). Even foreigners with advanced Japanese skills may have difficulty using honorifics. Therefore, it is recommended that employees of multinational companies receive specialized Japanese business training and learn how to use honorifics correctly in different situations.

Japan’s decision-making process is typically slow and emphasizes group consensus. This practice, known as nemawashi, refers to reaching consensus through informal communication before a formal meeting. For foreign companies accustomed to quick decisions, this may appear inefficient. However, understanding and respecting this style of decision-making is important to successfully doing business in Japan. Multinational companies need to learn to be patient and give their Japanese partners enough time for internal negotiations and decision-making.

In business meetings, Japanese people are usually more reserved and do not like to express objections directly. They may use vague expressions such as “倗いですね” (a bit difficult) to politely express rejection. Therefore, foreign business people need to learn to “observe words and emotions” and understand Japanese non-verbal communication. At the same time, you should also pay attention to the way you express your opinions and avoid being too direct or aggressive. Instead, you should use a more tactful and harmonious way of expression.

The exchange of business cards has special importance in Japanese business interactions. Correct business card exchange etiquette includes passing the business card with both hands, reading the other party’s business card carefully, making appropriate comments, etc. Exchanging business cards at the beginning of a meeting is not only a etiquette, but also an important way to understand the other party’s position and status. It is recommended to prepare business cards in both Japanese and English and ensure the accuracy of the Japanese part.

In addition, business relationships in Japan are often based on personal relationships. Therefore, participating in informal social events, such as business dinners or “second meetings” (informal gatherings after meals), is important for establishing and maintaining business relationships. In these settings, the conversation can be more relaxed, but etiquette still needs to be observed, such as moderate drinking, correct seating arrangements, etc.

In daily communication, the Japanese attach great importance to punctuality and commitment. Being late is considered extremely rude in Japan. If lateness is unavoidable, advance notice and a sincere apology should be given. Likewise, the Japanese expect 100% completion of what they promise. Therefore, care should be taken when making promises to ensure that they can be kept.

Language barriers are another challenge to overcome. Although Japan continues to become more international, Japanese is still the primary language of communication in many business situations. Even where English is used, there may be communication barriers due to the limited English proficiency common among Japanese people. Therefore, hiring excellent interpreters or encouraging employees to learn Japanese is a necessary investment for multinational companies.

Finally, it is also important to understand Japan’s “wa” culture. “和” represents harmony, and in the Japanese business environment, maintaining team harmony and avoiding open conflicts is considered very important. This means that when dealing with disagreements, private communication and negotiation should be pursued rather than public arguments.

Overall, successfully coping with cultural differences and mastering effective communication skills takes time and patience. Multinational companies and entrepreneurs should invest in cultural training, encourage employees to learn Japanese language and culture, and continue to accumulate experience in daily practice. At the same time, maintaining an open and respectful attitude and sincerely understanding and adapting to Japanese business culture will greatly increase your chances of success in the Japanese market.

7.3 Localization strategy

For multinational companies and entrepreneurs, developing an effective localization strategy is the key to success in the Japanese market. Localization is not just a simple language translation or product adjustment, but a comprehensive process involving products, marketing, human resources, corporate culture and other aspects. Successful localization can help companies better integrate into the Japanese market and win the trust and recognition of consumers.

Product localization is the most basic and important step. This includes not only translating product names, instructions for use, etc. into Japanese, but more importantly, adjusting products according to the preferences and needs of Japanese consumers. Japanese consumers have extremely high requirements for product quality and details, so there may be a need to improve the sophistication and quality of products. For example, many international food brands will adjust their recipes to suit Japanese taste preferences when entering the Japanese market. At the same time, Japanese consumers attach great importance to product packaging, and exquisite and environmentally friendly packaging designs can often enhance the market appeal of products.

Localization of marketing strategies is also very important. Advertising and marketing techniques in Japan can be very different from other countries. For example, Japanese advertising usually focuses more on emotional appeal and brand image building rather than direct product function promotion. Using local celebrities or anime character endorsements is also a common marketing technique. In addition, Japan’s social media ecosystem also has its own unique features, such as the widespread use of LINE and the high popularity of Twitter. Therefore, companies need to adapt their digital marketing strategies to Japan’s media environment and consumer behavior.

In terms of sales channels, it is also important to understand and utilize Japan’s unique business models. For example, convenience stores play an important role in Japan, not only as retail locations but also providing a variety of services. Many companies have rapidly expanded product coverage by cooperating with convenience stores. In terms of e-commerce, in addition to Amazon Japan, local platforms such as Rakuten Market and Yahoo! Shopping also occupy an important position. Enterprises need to study the characteristics of these platforms and formulate appropriate online sales strategies.

Localization of human resources is another key aspect. While sending foreign managers ensures cultural consistency, hiring local employees is essential for understanding the market, communicating with customers, and handling day-to-day matters. However, Japan’s employment culture has its own unique features, such as lifetime employment system, seniority-based system, etc. Multinational companies need to appropriately integrate Japanese employment habits while maintaining their own corporate culture to attract and retain outstanding local talents.

Localization of corporate culture also needs to be handled carefully. Multinational companies often need to find a balance between maintaining a globally consistent corporate culture and adapting to local Japanese culture. For example, many Japanese companies still maintain relatively strict hierarchies and work systems, while many Western companies promote flatter and more flexible ways of working. Multinational companies operating in Japan need to consider how to strike a balance between the two cultures to attract Japanese employees without losing the company’s global character.

Customer service is an area that Japanese companies are proud of, and it is also an area that foreign companies need to pay special attention to. The Japanese concept of “お客様は神様です” (the customer is God) is reflected in extremely attentive service. This is not only reflected in face-to-face communication, but also includes product after-sales service, customer complaint handling and other aspects. Multinational companies need to train employees and improve service levels to meet the high expectations of Japanese consumers.

Localization of legal compliance is equally important. Japan has many special laws and regulations, such as the aforementioned labor law, personal information protection law, etc. Businesses need to ensure that their operations are fully compliant with Japanese legal requirements. This may require adjustments to company policies, business processes, and even technology systems.

Establishing local partnerships can significantly speed up the localization process. Establishing joint ventures with local companies, finding reliable suppliers and distributors, and cooperating with local research institutions can all help companies integrate into the Japanese market faster and gain access to local resources and knowledge.

A successful localization strategy requires a comprehensive, in-depth and sustained effort. It requires companies to have a thorough understanding of the Japanese market and be able to flexibly adjust their products, services and operations while maintaining the company’s core values ​​and competitive advantages. This process may require a significant investment of time and resources, but it is a necessary and worthwhile investment for multinational companies and entrepreneurs looking to achieve long-term success in the Japanese market. By carefully designing and executing localization strategies, companies can not only better meet the needs of Japanese consumers, but also occupy a favorable position in the world’s third largest economy and provide new growth points for global business development.

Comprehensive strategy for innovative fund application

8.1 Multi-channel financing

In developing innovative undertakings in Japan, funding is often one of the key factors that determine success or failure. A multi-channel financing strategy can not only increase the hope of obtaining funds, but also bring many advantages to the enterprise. The core of this strategy is not to pin everything on a single source of funding, but to spread risks through trusted financing channels while maximizing the possibility of obtaining funds.

Multi-channel financing can significantly increase the probability that a company will obtain the funds it needs. Different financing channels have their own evaluation criteria and preferences. By trying multiple channels at the same time, companies can increase their chances of successful matching. For example, some innovative projects may not qualify for traditional bank loans but may qualify for venture capital or government grants. By applying for these different types of funding at the same time, businesses greatly increase their likelihood of receiving financial support.

Multi-channel financing helps optimize the capital structure. Different financing methods have different cost and risk characteristics. For example, although equity financing does not require regular repayment of principal and interest, it will result in the founder’s equity; although debt financing does not affect the company’s ability to strike a balance between capital costs, risk control, and operational autonomy through a reasonable combination of different types of financing. , build a capital structure that best suits your own development stage and needs.

Multi-channel financing can bring in additional non-value funding. Different financing channels often come with different resources and support. For example, in addition to providing funds, venture capital institutions may also bring industry insights, management experience and business networks; government subsidies may come with policy support and market access convenience; crowdfunding can not only raise funds, but also conduct market verification and brand promotion. Through multi-channel financing, enterprises can obtain the added value of these incentives and accelerate their own development.

Multi-channel financing can help improve an enterprise’s ability to resist risks. When financing channels tighten due to changes in the market environment or other factors, companies can still obtain financial support through other channels. This flexible, innovative type of enterprise is urgently important because the innovation process is often full of uncertainty and requires continuous financial investment.

Multi-channel financing can enhance the credibility and bargaining power of enterprises. Successfully obtaining financial support from multiple sources means that the company’s business model and development prospects have been recognized by many parties, which can enhance the confidence of other potential investors. At the same time, when companies have multiple financing options, they can also obtain more favorable conditions in negotiations.

However, implementing a multi-channel financing strategy also faces some challenges. It requires companies to invest more time and energy in preparing different application materials and responding to different due diligence requirements. In addition, enterprises also need to balance the expectations and requirements provided by different funding parties. Therefore, when adopting a multi-channel financing strategy, enterprises need to formulate reasonable financing plans based on their own resources and capabilities to ensure maximum cost. But multi-channel financing strategies provide innovative companies with greater flexibility and more opportunities. By rationally using this non-strategy, enterprises can better cope with the financial needs in the innovation process and obtain support from various financial resources for financial needs.

8.2 How to choose a suitable financing method

Choosing appropriate financing methods is a key part of innovative corporate funding strategies. Cooling financing methods have their own characteristics and applicability. Enterprises need to carefully choose the most appropriate financing method based on their own development stage, capital needs, industry characteristics, risk tolerance and other factors. Below we will discuss in detail how to use it in Japan’s innovation ecosystem. Make smart financing choices.

Enterprises need to clarify their development stages and funding needs. It is often difficult for some seed-stage companies to obtain traditional bank loans due to their lack of operating history and tangible assets. Companies at this stage may be better suited to seek angel investment or participate in startup accelerator programs. These financing methods can not only provide entrepreneurial capital, but also bring valuable guidance and resources. For example, accelerator programs such as Japan’s Plug and Play and 500 Startups Japan provide financing and entrepreneurial support for early-stage entrepreneurial companies.

For companies that already have product prototypes and are beginning market validation, venture capital (VC) may be a more suitable choice. There are a large number of active venture capital institutions in Japan, such as JAFCO, Global Brain, SBI Investment, etc., which not only provide funds but also funds. However, companies need to pay attention to the fact that accepting venture capital means transferring some company control, so it is necessary to Carefully consider whether it is consistent with the company’s long-term development strategy.

For companies that already have stable income but need capital to expand, they may consider needing financing. Japanese banks generally cater to small and medium-sized enterprises, such as Mitsubishi UFJ Bank, Mizuho Bank, etc., which have loan products specifically targeted at innovative enterprises. In addition, the Japan Finance Corporation (JFC) also provides low-interest loans to small and medium-sized enterprises. The advantage of debt financing does not mean equity, but the company needs to be able to replenish the principal and interest on time.

Government subsidies and grants are another financing channel worth paying attention to, especially for those companies engaged in research and development of cutting-edge technologies or in line with national strategic directions. Japan’s Ministry of Economy, Trade and Industry (METI) and the New Energy Industrial Technology Development Organization (NEDO) have provided multiple R&D subsidy projects. This type of funding does not require or raise equity, but the application process can be complex and often has strict usage restrictions and reporting requirements.

For consumer products or services with a certain brand, crowdfunding may be a good option. Japan has well-known crowdfunding platforms such as Makuake and Campfire. Crowdfunding not only raises funds, but also allows for market validation and brand promotion. Businesses need attention, and the success of crowdfunding often requires a lot of effort in marketing and community operations.

Businesses can also consider strategic investments. If some of the company’s innovative projects are consistent with the strategic directions of large companies, they can seek strategic investment from these companies. Large Japanese companies such as Toyota and SoftBank have active corporate venture capital departments. In addition to bringing in funds, strategic investment may also bring business cooperation opportunities, but companies need to pay attention to maintaining their independence.

When choosing a financing method, companies also need to consider the following key factors:

• Cost of capital: The cost of capital varies widely among different financing methods. For example, government grants have the lowest cost of capital, while some venture capital investments may require a high rate of return. Businesses need to assess whether they can afford these costs.
• Control Effect: Equity financing results in founder control, while debt financing does not. Businesses need to weigh the need for capital against the retention of control.
• Speed ​​of financing completion: The time taken for different financing methods varies greatly. For example, crowdfunding may be completed in a few weeks, while government grant application and financing may take months. Businesses need to choose based on the urgency of their funding needs.
• Added value: In addition to capital, financiers often bring other value to consider. For example, investments from well-known VCs can enhance a company’s credibility, while strategic investors may bring business collaboration opportunities. Companies should consider these factors.
• Future Financing Impact: Current financing options may impact future financing opportunities. For example, premature large-scale equity financing may cause founders to lose control and affect subsequent financing decisions.
• Industry characteristics: Funding needs and return cycles vary greatly among different industries. For example, the biotechnology industry usually requires long-term and large investments, while the Internet industry may be more suitable for rapid iteration of small-amount multiple rounds of financing.

Financing is a dynamic process , and as a company grows, its most suitable financing methods may also change. Therefore, enterprises need to regularly evaluate their financing needs and market environment and adjust financing strategies in a timely manner. At the same time, it is also very important to establish a good financial management system and investor relations to lay the foundation for future financing. Choosing a suitable financing method is a process that requires consideration and prudent decision-making. Enterprises need to have a comprehensive and in-depth understanding of the characteristics of various financing methods and a clear understanding of their own needs and conditions in order to make a process that is most beneficial to the company’s long-term development. financing options.

8.3 Fund planning and use suggestions

After successfully obtaining financing, how to effectively plan and use funds becomes the next important challenge for innovative enterprises. Reasonable fund planning and use are not only related to the daily operations of the company, but also directly affect the success of innovative projects. Below we will discuss in detail how innovative enterprises should plan their funds and provide some suggestions on the use of funds.

Companies need to develop detailed plans for the use of funds. The plan should be based on the company’s overall strategy and specific innovation project needs. Generally, the fund use plan should include the following main aspects:

• R&D investment: For innovative companies, this is usually a set use of funds. It is necessary to plan the funding requirements for each R&D stage in detail, including personnel wages, equipment purchase, material costs, etc.
• Market development: including market research, product promotion, channel construction and other expenses. In the Japanese market, considering its particularity, it may be necessary to invest more money in localized marketing.
• Talent recruitment and training: Excellent talents are the core driving force for innovation. Funding plans should include budget for attracting and retaining key talent.
• Operating costs: including office space rental, daily management expenses, etc.
• Reserve fund: Unexpected situations often occur during the innovation process, and a reserve proportion of funds is used as reserve funds.

Companies should be careful to remain flexible when formulating plans for how to use their funds. The innovation process is full of uncertainties, and initial plans may need to be adjusted based on actual conditions. , the fund use plan should have a certain degree of flexibility and be able to cope with possible corresponding changes. Secondly, focus on revenue management. Even if a large amount of financing is obtained, the company must strictly control the speed of revenue output to ensure that the funds can support the company’s operations until the next round of financing or profitability. In Japan, due to the particularities of the business environment (such as long payment collection cycles), narrow management is extremely important.

It’s best to set clear milestones and evaluation metrics. This not only helps the company track progress internally, but is also an important reference for investors to prove the effectiveness of the use of funds. This is extremely important for foreign businesses operating in Japan, as Japanese investors are generally conservative and need to see sound proof of progress.

In terms of specific use of funds, we have the following suggestions:

• Priority will be given to ensuring the funding needs of core businesses and key innovation projects. When resources are limited, we must learn to make trade-offs and use the main funds in areas that can create the most value.
• Reasonably control the speed of personnel expansion. While talent is important, too rapid expansion may bring about management problems and heavy labor cost burdens. In Japan, as the attraction of motivating employees has increased, it is even more necessary to comprehensively consider personnel expansion plans.
• Take advantage of Japan’s innovation ecosystem. For example, you can consider using shared office spaces to save RMB R&D costs, using government-supported R&D facilities to reduce equipment investment, participating in industry-university cooperation projects to share R&D costs, etc.
• Pay attention to intellectual property investment. In Japan, there is a strong awareness of intellectual property protection, and related investment may increase, but it is very important to protect innovation results and enhance corporate value.
• Guided investment in brand building. Japanese consumers have high brand loyalty, and early guidance in brand building may bring long-term returns.
• Establish a strict financial management system. Including developing detailed budgets, conducting regular financial analysis, establishing effective cost control, etc. This is not only conducive to improving the efficiency of capital use, but also an important basis for winning the trust of investors.
• Consider exchange rate risk. For foreign companies operating in Japan, they must consider controlling the risks arising from exchange rates and use financial instruments for hedging when necessary.
• Take advantage of Japan’s tax incentives. In order to encourage innovation, the Japanese government has introduced preferential tax policies, such as super tax on R&D expenses and innovative tax exemption policies. Enterprises should fully understand and utilize these policies to optimize tax planning.
• Pay attention to investor relations management. Regularly report the use of funds and the company’s progress to investors and maintain good communication. This is not only a responsible performance for investors, but also helps create favorable conditions for possible future refinancing.
• Cultivate a culture of frugality. After obtaining financing, companies should continue to maintain the frugal style of entrepreneurial compatriots and avoid unnecessary extravagance and waste. This is particularly important in Japan, because Japanese business culture places great emphasis on long-term integrity management of enterprises.

Finally, enterprises should establish a regular fund use evaluation mechanism. By regularly reviewing and analyzing the use of funds, problems can be discovered and adjustments made in a timely manner. This process not only includes the analysis of financial indicators, but also evaluates whether the use of funds promotes the progress of innovative projects and creates expected value for the company. Reasonable capital planning and efficient capital utilization are one of the key factors for the success of innovative enterprises. Enterprises need to find a balance between strict control and flexible adjustments, not only to ensure that funds are used for the most critical innovation activities, but also to leave room for uncertainty. Through scientific planning and refined execution, companies can maximize the value brought by financing, promote the smooth progress of innovative projects, and ultimately achieve success in the highly competitive Japanese market.

Case Studies

9.1 Cases of companies that successfully obtained government financial support

Case 1: How AI technology companies obtain NEDO financial support

An artificial intelligence start-up company in Tokyo called TechVision has successfully received large-scale financial support from the New Energy Industrial Technology Development Organization (NEDO), which has laid a solid foundation for the company’s rapid development. TechVision focuses on developing AI visual inspection systems for industrial automation, and its technology is expected to significantly improve the production efficiency of Japan’s manufacturing industry.

TechVision’s process of successfully applying for NEDO funding is worth exploring in depth. First of all, the company team is keenly aware that the “AI Technology Innovation Support Plan” released by NEDO in 2023 is highly consistent with the company’s technical direction. They quickly assembled a dedicated application team that included technical experts, financial staff and consultants with experience in government projects.

During the application process, TechVision paid special attention to the following aspects: First, it clearly demonstrated the fit of its technology with Japan’s national strategy, emphasizing the importance of AI visual inspection systems in improving the competitiveness of Japan’s manufacturing industry; second, it provided detailed information The technology roadmap and milestone plan enable review experts to clearly understand the feasibility and potential impact of the project; third, it demonstrates a strong industry-university-research cooperation network, including a cooperation agreement with the Artificial Intelligence Research Institute of the University of Tokyo and a number of Japanese leading Letter of intent from manufacturing company.

In addition, TechVision also pays special attention to intellectual property strategy and details its patent layout plan in the application materials, which is often an important consideration in Japan’s technological innovation funding projects. The company has also developed a clear commercialization plan, including market analysis, marketing strategy and five-year financial forecasts, which strongly demonstrates the long-term sustainability of the project.

During the defense session, TechVision’s team demonstrated profound technical skills and clear business thinking, successfully dispelling the review experts’ doubts about technical feasibility and market prospects. In the end, TechVision received 300 million yen in financial support for three years.

This funding has greatly accelerated TechVision’s technology development process. The company used the funds to expand its R&D team from 15 to 50 people, including several senior AI experts recruited from Silicon Valley. At the same time, the company also purchased a batch of high-end computing equipment and established a dedicated deep learning laboratory.

NEDO’s support not only brings funds, but also greatly enhances TechVision’s visibility and credibility in the industry. This makes it easier for the company to attract high-quality talents and creates favorable conditions for subsequent business cooperation and financing. Within 18 months after receiving support from NEDO, TechVision successfully signed technical cooperation agreements with three large Japanese manufacturing companies and completed Series A financing with a valuation of 5 billion yen.

The successful case of TechVision shows that to obtain government financial support like NEDO, companies not only need to have strong technical strength, but also need to be good at integrating their own innovation with national strategic needs. At the same time, they must have a clear commercialization path and complete Execute the plan. In addition, building a strong industry-university-research network, paying attention to intellectual property protection, and well-prepared and excellent defense are also key factors for success.

Case 2: Biotechnology companies’ experience in obtaining JST financing

In the Biomedical Industrial Park in Kobe, Japan, a start-up company called BioNova has successfully received important financial support from the Science and Technology Promotion Agency (JST) for its innovative research in the field of early cancer detection. This not only provides sufficient funding for BioNova’s research and development work, but also greatly enhances the company’s influence in academia and industry.

BioNova’s core technology is an early cancer detection method based on liquid biopsy, which achieves early diagnosis of cancer by detecting trace amounts of tumor DNA in the blood. If this technology is successfully commercialized, it may completely change the mode of cancer diagnosis and treatment and be of great significance to improving the survival rate of cancer patients.

When applying for JST’s “Innovative Research and Development Promotion Project”, BioNova adopted several key strategies:

First, the company attaches great importance to cooperation with academia. The founding team of BioNova itself came from Japan’s top medical schools. They took advantage of this advantage and established close cooperative relationships with research teams from many universities. In their application materials, they detailed how these collaborations will accelerate technology development and ensure that research results can be quickly translated into clinical applications.

Second, BioNova places great emphasis on demonstrating the innovativeness and potential impact of its research. They not only explained the technical principles in detail, but also provided preliminary clinical trial data to prove the feasibility of the technology. More importantly, they paint a clear picture of how this technology could transform existing medical practices, as well as the potential impact on Japan’s healthcare system and overall social welfare.

Third, BioNova specifically emphasized the project’s risk management strategy in its application. They candidly pointed out the challenges that may be faced in the process of technology development and commercialization, and proposed detailed solutions. This candid and thoughtful attitude left a deep impression on the review experts.

In addition, BioNova also pays special attention to intellectual property protection. Prior to the application, the company had submitted multiple patent applications and developed a comprehensive intellectual property strategy. This not only protects the company’s core technology, but also demonstrates to JST the company’s emphasis on technological innovation and its determination for long-term development.

During the project proposal stage, BioNova’s team demonstrated excellent professionalism and communication skills. Not only can they explain complex technical principles in a simple and easy-to-understand manner, but they can also clearly explain the social value and business prospects of the project. This greatly enhances the review experts’ confidence in the project.

In the end, BioNova successfully obtained JST financial support of 500 million yen for five years. The funding allowed BioNova to significantly expand its research and development team from 10 to 30 people and establish an advanced molecular biology laboratory. More importantly, this funding enables BioNova to initiate large-scale clinical trials, which are critical to verify the effectiveness of the technology and promote commercialization.

JST’s support not only brings funds, but also greatly enhances BioNova’s industry status. Within two years of receiving funding, BioNova successfully established strategic partnerships with two large Japanese pharmaceutical companies and attracted venture capital from the United States and Europe.

BioNova’s successful experience shows that to obtain government research funds like JST, companies need to make efforts in the following aspects: first, they must have truly innovative and socially valuable research directions; second, they must establish a strong industry-university-research team. Cooperation network; third, it must have a clear technology roadmap and risk management strategy; fourth, it must pay attention to intellectual property protection; fifth, it must be able to clearly and powerfully demonstrate the scientific value and commercial prospects of the project. In addition, forming a team with both strong academic background and rich industrial experience is also a key factor for success.

9.2 Successful cases of venture capital

Case 1: The financing path of Japanese financial technology companies

In the bustling Minato District of Tokyo, a financial technology company called PayEase has attracted the attention of many investors with its unique payment solution. PayEase focuses on providing an integrated payment and financial management platform for small and medium-sized enterprises. Its innovative solution not only simplifies the payment process, but also integrates intelligent financial analysis and risk management functions, filling an important gap in financial services for Japanese small and medium-sized enterprises. .

PayEase’s financing path is quite dramatic and fully demonstrates the characteristics of Japan’s venture capital ecosystem. The company was founded in 2020 by several veterans from large Japanese banks and technology companies. Although the founding team has rich industry experience, they still faced the challenge of financing in the early stages of entrepreneurship.

When seeking seed round financing, PayEase’s team first tried traditional financing channels, such as bank loans and government grants. However, these efforts have had little success as the company does not yet have a stable source of revenue. The turning point came in 2021, when PayEase participated in a fintech startup competition in Tokyo. Although it did not win the final championship, the company’s innovative concept attracted the attention of several judges, including a partner from the famous venture capital firm JAFCO.

This chance encounter opened the door to the venture capital world for PayEase. JAFCO’s investment managers were attracted by PayEase’s business model, especially its precise positioning of the pain points of Japanese small and medium-sized enterprises. After several rounds of in-depth due diligence and negotiations, JAFCO finally decided to lead PayEase’s seed round with an investment of 100 million yen.

JAFCO’s investment not only brings much-needed funds, but more importantly, it brings valuable industry resources and professional guidance. JAFCO helped PayEase improve its business model, introduced several experienced industry consultants, and assisted the company in establishing a more standardized corporate governance structure. This support played a key role in the subsequent rapid development of PayEase.

With the support of seed round funding, PayEase quickly expanded its R&D team and accelerated product development progress. In the first six months of product launch, the company attracted more than 1,000 SME customers, confirming the strong demand for this service. This achievement has also won PayEase more attention from investors.

A year after launching the product, PayEase launched its Series A round of financing. This time, the company has attracted interest from more prominent investment institutions, including the SoftBank Vision Fund and several U.S. venture capital funds focused on fintech. After fierce competition, SoftBank Vision Fund finally won the right to lead the investment, with an investment amount of 2 billion yen. This round of financing not only provides sufficient financial support for PayEase, but also greatly enhances the company’s market visibility.

The joining of SoftBank brings global vision and rich industry resources to PayEase. With the support of SoftBank, PayEase began to explore overseas markets, especially the fast-growing e-commerce market in Southeast Asia. At the same time, SoftBank also assisted PayEase in establishing cooperation with other technology companies in its investment portfolio, further enriching PayEase’s product ecosystem.

PayEase’s successful financing experience provides several important insights:

• Product-market fit is critical. PayEase’s success largely stems from its accurate grasp of the needs of Japanese small and medium-sized enterprises.
• Industry experience and team background are key factors in attracting early investment. The rich experience of PayEase’s founding team gives investors confidence.
• Participating in industry events and entrepreneurial competitions may bring unexpected opportunities. It was through an entrepreneurial competition that PayEase got the opportunity to contact JAFCO.
• The strategic value of early investors often exceeds the capital itself. The industry resources and guidance JAFCO brought to PayEase played a key role in the company’s rapid growth.
• The ability to demonstrate rapid growth and market validation is key to attracting large investments. PayEase’s ability to attract a large number of customers in a short period of time is an important factor in winning a large amount of Series A financing.
• Choosing investors with global vision and rich resources can bring more opportunities for the company’s long-term development. The addition of SoftBank has opened up a path for international development for PayEase.

The case of PayEase demonstrates the vitality of the Japanese venture capital ecosystem and highlights the huge potential of innovative financial technology companies in the Japanese market. As the Japanese government continues to promote financial innovation and digital transformation, innovative companies like PayEase are expected to receive more development opportunities and investment support.

Case 2: The story of foreign founders receiving venture capital support in Japan

In a shared office space in Tokyo’s Shinjuku district, a startup called EcoPackJapan is quietly changing Japan’s packaging industry. The company, led by an American founder, John Smith, focuses on developing biodegradable food packaging materials and aims to solve Japan’s serious plastic pollution problem. Although there are many challenges in starting a business in Japan as a foreigner, EcoPackJapan has successfully gained the favor of Japan’s top venture capital investors with its innovative technology and deep understanding of the local market.

John Smith’s entrepreneurial journey began while he was studying in Japan. As an exchange student studying environmental engineering, he saw firsthand Japan’s problems with excessive packaging and plastic use. After graduation, John decided to stay in Japan and apply his professional knowledge to solve this environmental problem. In 2019, he co-founded EcoPackJapan with two Japanese classmates.

In the early days of entrepreneurship, EcoPackJapan faced many challenges. As a foreigner, John encountered difficulties in understanding Japanese business culture and establishing a local network. In addition, the company’s innovative technology, while promising, has not yet been proven by the market, making it difficult to attract investment.

A turning point came in 2020, when the Japanese government launched a plan to support environmental innovation. EcoPackJapan successfully applied for a small government grant, which not only provided the company with much-needed financial support, but also increased its credibility in the local market.

Using the funding, EcoPackJapan developed its first-generation product prototype – a fully degradable food packaging film made from seaweed extract. This kind of packaging film is not only environmentally friendly, but also has the property of extending the shelf life of food, which has attracted widespread attention in the Japanese food industry.

EcoPackJapan’s breakthrough progress quickly attracted the attention of the venture capital community. At the beginning of 2021, Green Future Capital, a well-known Japanese environmental technology venture capital fund, expressed strong interest in EcoPackJapan. After several rounds of in-depth technical due diligence and market analysis, Green Future Capital decided to lead EcoPackJapan’s seed round with an investment of 200 million yen.

Green Future Capital’s investment not only brings funds, but also opens the door to the Japanese business community for EcoPackJapan. The partners of the venture capital fund used their extensive contacts in the Japanese food and retail industries to introduce several potential large customers to EcoPackJapan. This greatly accelerates the commercialization process of EcoPackJapan.

However, as a foreign-led startup, EcoPackJapan also faces some unique challenges during the financing process. Many Japanese investors are wary of foreign founders, worried that cultural differences could affect a company’s operations. To solve this problem, John adopted several key strategies:

• He actively learns Japanese and strives to improve his language skills, which greatly improves communication with Japanese investors and partners.
• EcoPackJapan hired a senior Japanese executive as the company’s chief operating officer to handle relations with local customers and investors.
• The company places special emphasis on the combination of globalization and localization of its technology. While the core technology is derived from international research, product development and market strategies are tailored for the Japanese market.
• John actively participates in Japan’s entrepreneurial ecosystem, often attending industry events and entrepreneurial forums, and gradually establishing his own personal brand in Japan’s green technology field.

The efforts finally paid off. Within 18 months of completing its seed round of financing, EcoPackJapan successfully signed pilot project agreements with three large Japanese food manufacturers. The company’s number of employees has expanded from the initial 5 to 30, most of whom are local Japanese talents.

In early 2023, as the product gradually gained market recognition, EcoPackJapan launched Series A financing. This time, the company attracted broader investor interest, including several international venture capital funds. In the end, led by JAFCO, Japan’s leading venture capital fund, and followed by global environmental fund Earth Capital, EcoPackJapan successfully raised 1.5 billion yen.

EcoPackJapan’s success story provides several important inspirations for other foreigners interested in starting a business in Japan:

• Deeply understanding and solving practical problems in the Japanese market is the key to success. EcoPackJapan’s products directly address Japan’s environmental pain points and have won recognition from the market and investors.
• It is crucial to actively integrate into the local entrepreneurial ecosystem and establish an extensive network of contacts.
• Balance international vision and localized operations. Utilize innovative thinking brought by an international background while focusing on adapting to Japanese business culture and market needs.
• Assembling a diverse team, especially bringing in Japanese executives who understand the local market, can make up for the disadvantages of foreign founders.
• Continuously improve language skills and cultural understanding, which not only helps business operations, but also enhances investor confidence.
• Taking advantage of government support programs can provide critical early support and credibility to startups.

The EcoPackJapan case shows that although foreigners face unique challenges when starting a business in Japan, as long as they have innovative ideas, a deep understanding of the market, and the determination to adapt to the local environment, they can still succeed in Japan, the world’s third largest economy. success. As the Japanese government continues to promote innovation and internationalization, international entrepreneurial teams like EcoPackJapan are expected to find more opportunities and support in Japan.

9.3 Cases of crowdfunding innovative projects

Case 1: Smart home products successfully crowdfunded through the Makuake platform

In a small makerspace in Tokyo, a young team of engineers and designers are developing a revolutionary smart home product. This smart lighting system called “LightMood” can not only automatically adjust the light according to the user’s biological rhythm, but can also link with other smart devices in the home to create a perfect home environment. However, as a small team just starting out, they faced a shortage of funds. At this critical moment, Makuake, one of Japan’s largest crowdfunding platforms, became a springboard for them to realize their dreams.

The LightMood team chose Makuake as a crowdfunding platform for several considerations: First, Makuake has a large user base of technology enthusiasts and early adopters in Japan, which is highly consistent with LightMood’s target customers. Secondly, the marketing support and project display functions provided by Makuake can help them better present their product ideas to potential backers.

Before launching the crowdfunding project, the LightMood team made full preparations:

• Product Development: They ensure they have a fully functional prototype product and conduct extensive user testing to collect feedback and continuously improve it.
• Market research: The team conducted an in-depth study of the Japanese smart home market and clarified the product’s unique selling points and target user groups.
• Crowdfunding page design: They invest a lot of time in designing the crowdfunding page, including detailed product introduction, high-quality pictures and videos, and clear reward settings.
• Social media pre-heating: Before the crowdfunding starts, the team starts pre-heating on major social media platforms to attract the attention of potential supporters.
• Media Relations: They contacted several technology blogs and online magazines to try to get media coverage when the crowdfunding campaign began.

After the official launch of crowdfunding, LightMood’s project attracted widespread attention on the Makuake platform. Their goal was to raise 5 million yen within 30 days, but within just 48 hours of the project going live, 80% of the goal was achieved. This “hit” effect has aroused more media interest. Several well-known technology blogs reported on LightMood, further promoting the spread of the project.

During the crowdfunding process, the LightMood team adopted an active communication strategy:

• They respond promptly to every comment and question, demonstrating the team’s professionalism and attention to user needs.
• Regularly release project updates, including product development progress, new feature demonstrations, etc., to maintain the enthusiasm of supporters.
• Based on user feedback, they also added new color options and some additional features during the crowdfunding period. These flexible adjustments further enhanced the product’s appeal.

In the end, LightMood’s crowdfunding project raised more than 20 million yen in 30 days, 4 times the original goal. More importantly, they gained nearly 1,000 supporters, which not only provided valuable market validation for the product, but also laid the foundation for future market promotion.

After the successful crowdfunding, the LightMood team faced the challenge of turning the promise into reality. They took the following measures:

• Established a detailed production plan and established cooperative relationships with reliable manufacturers.
• Send regular updates to supporters to maintain transparency and trust.
• A customer service team has been established to provide support to backers who will receive the product.

Although there were some minor setbacks during the production process, such as delays in the supply of certain components, the LightMood team used active communication and problem solving to ultimately complete the shipment of all products only two weeks late from the promised delivery date.

LightMood’s crowdfunding success not only provided the company with necessary funding, but also brought unexpected benefits:

• Market verification: The success of crowdfunding proves the market demand for such products and provides confidence for the company’s future development.
• User feedback: Through close interaction with supporters, the team obtained a large amount of valuable user feedback, which was used to further improve the product.
• Media attention: The media coverage obtained during the crowdfunding period greatly increased brand awareness and laid the foundation for subsequent market promotion.
• Investor interest: The success of crowdfunding has attracted the attention of several venture capital companies, creating opportunities for the company’s subsequent financing.

The case of LightMood shows that crowdfunding is not only a financing method, but also a powerful market validation and brand building tool. For Japanese hardware startups, making good use of crowdfunding platforms such as Makuake can help them obtain financial support, user feedback and market attention in the early stages, laying a solid foundation for the success of their products.

Case 2: Using the Campfire platform to donate funds to social innovation projects

In Fukushima Prefecture, Japan, a non-profit organization called Green Hope is working to introduce sustainable agricultural practices into reconstruction efforts after the nuclear accident. The organization’s founder, Mako Yamada, a young environmental scientist, hopes to not only restore agricultural production in Fukushima but also establish a more environmentally friendly and sustainable community model by promoting organic farming and the use of renewable energy. However, as a newly established non-profit organization, Green Hope is facing a shortage of funds. In this case, Yamada decided to try to raise project funds through Campfire, a well-known crowdfunding platform in Japan.

There are several reasons for choosing Campfire as a crowdfunding platform: First, Campfire has a high reputation and credibility in Japan, especially in social welfare projects. Secondly, Campfire provides flexible project types, including “All-or-Nothing” and “Keep-it-All” modes, which gives “Green Hope” more choices. Finally, there are a large number of supporters in Campfire’s user group who are concerned about social issues and environmental issues, which matches the nature of the “Green Hope” project very well.

Before launching the crowdfunding project, the “Green Hope” team made detailed preparations:

• Project planning: They developed a detailed project plan, including specific implementation steps, expected results, and fund use plans.
• Storytelling: The team spent a lot of time building a narrative for the project that emphasized the importance of Fukushima’s reconstruction and the long-term impact of sustainable agriculture.
• Video production: They created a short but powerful video showing the current situation in Fukushima and the vision of the project.
• Reward design: Although it is a donation project, they have designed a series of creative rewards, such as organic agricultural products, participation in farm experiences, etc., to increase the supporters’ sense of participation.
• Social media mobilization: Before the crowdfunding starts, they start promoting on Twitter and Facebook to attract the attention of potential supporters.

After the official launch of the crowdfunding project, the “Green Hope” project attracted widespread attention on the Campfire platform. Their goal is to raise 10 million yen in 60 days. The uniqueness and social significance of the project quickly aroused media interest, and several mainstream news websites reported on the project, greatly increasing the project’s exposure.

During the crowdfunding process, the “Green Hope” team adopted an active communication and marketing strategy:

• Regular updates: They release project progress every week, including photos and videos of preliminary preparations, allowing supporters to feel the actual progress of the project.
• Interactive activities: The team organized several online Q&A sessions, inviting supporters to communicate directly with the project team to enhance trust.
• Partner support: They successfully invited several well-known environmental organizations and sustainable agriculture experts to endorse the project, which increased the credibility of the project.
• Social media communication: The team encouraged supporters to share the project on social media and planned several small online activities to keep the buzz going.
• Transparent financial reporting: Regularly announce the use of funds, allowing supporters to clearly understand the whereabouts of each donation.
• Personalized rewards: Unique rewards are designed for supporters of different levels, such as personal participation in planting experiences, customized organic agricultural product gift boxes, etc.
• Local community participation: Inviting project residents to participate in some activities increases the local influence of the project.
• Media reports: Actively contacted relevant media and obtained some positive reports, which expanded the scope of the project.

Through these, the “Green Hope” team not only successfully transmitted the strategy to the target funds, but also established a community network that supports sustainable agriculture in the process, laying a solid foundation for the long-term development of the project.

Frequently Asked Questions

10.1 Application eligibility issues

When applying for startup funding, many entrepreneurs are often confused about whether they are eligible. Generally speaking, eligibility will vary depending on the source of funding. For government funding, applicants are often required to have specific educational background, industry experience, or how long the company has been established. For venture capital, investors pay more attention to the capabilities of the entrepreneurial team, the innovation and market potential of the project. Whatever the case, entrepreneurs should read the application guidelines carefully to make sure they meet all requirements. If you are in doubt about certain conditions, you can contact the funding provider directly for consultation to avoid unnecessary obstacles in the application process.

10.2 Restrictions on the use of funds

Limitations on the use of funds are another common concern for entrepreneurs. Government funds usually have stricter usage regulations, which may restrict funds from being used in specific areas, such as research and development, equipment purchase, or personnel training. These regulations are intended to ensure that public funds are used rationally and efficiently. Entrepreneurs need to understand these regulations in detail and provide a clear plan for how to use the funds when applying. In contrast, venture capital is used with a higher degree of freedom. Investors pay more attention to the overall development and returns of the company rather than the specific flow of funds. However, this does not mean that the funds can be used as you please. Entrepreneurs still need to develop a reasonable budget plan and regularly report the use of funds to investors to maintain a good trust relationship.

10.3 Intellectual Property Protection

Protecting your idea during the application process is a concern for many entrepreneurs. In order to demonstrate the attractiveness of the project without revealing core secrets, entrepreneurs can adopt some strategies. For example, when communicating with potential investors, you can sign a confidentiality agreement; when writing a business plan, you can focus on describing the market value and team advantages of the project without going into too many technical details. In addition, it is important to understand Japan’s intellectual property legal framework. Japan has a complete patent, trademark and copyright protection system. Entrepreneurs should consider applying for appropriate intellectual property protection for their ideas as early as possible, such as patent applications or trademark registrations. This not only protects your own rights and interests, but also increases the value of the project in the eyes of investors.

10.4 Re-application after failure

Many entrepreneurs may feel frustrated when faced with failed applications. However, failure does not mean the end but provides valuable learning opportunities. For re-application for government funding projects, entrepreneurs should carefully analyze previous feedback to identify deficiencies in the application. You can consider adjusting the project plan, strengthening the team configuration, or improving the business model. At the same time, it is also important to maintain communication with relevant departments and understand the latest application requirements and evaluation standards. Learning from failures and improving upon them is the key to success. Entrepreneurs can reflect on whether the project truly meets market demand, whether the team’s capabilities are sufficiently matched, and whether the financial plan is reasonable. Through continuous improvement and adjustment, the chances of successful re-application are increased. Remember, many entrepreneurial success stories are preceded by multiple failures. The key is to maintain resilience and an attitude of learning. -How to learn from failures and improve

Tax considerations

11.1 Consideration of relevant tax preferential policies for innovation funds

In Japan, in order to encourage innovation and entrepreneurship, the government has formulated a series of preferential tax policies for innovation funds. These policies aim to reduce the tax burden on entrepreneurs and provide more financial support for business development. For example, companies that engage in specific R&D activities may enjoy the preferential super deduction of R&D expenses. In addition, some local governments also provide additional tax incentives, such as income tax exemptions for high-tech enterprises. Entrepreneurs should be fully aware of these policies and consider their potential impacts in financial planning. At the same time, it should also be noted that these preferential policies may be time-sensitive or have specific conditions, and it is necessary to pay attention to policy updates regularly to ensure that enterprises can continue to benefit. Reasonable use of these tax incentives can not only reduce the tax costs of enterprises, but also provide more financial support for innovative activities, thereby enhancing the competitiveness of enterprises.

11.2 Tax implications of different financing methods

Different financing methods will have different impacts on a company’s taxes, and entrepreneurs need to consider this when choosing a financing method. For example, interest payments on debt financing (such as bank loans) are often deductible before tax, which may reduce a business’s taxable income. Equity financing does not have such tax advantages, but may bring other benefits, such as not requiring regular repayments of principal. In addition, certain special financing instruments, such as convertible bonds, may involve more complex tax treatments. Entrepreneurs also need to consider the impact of different financing methods on the company’s cash flow and other financial obligations that may arise. When making financing decisions, it is recommended to consult a professional tax advisor to comprehensively evaluate the tax implications of various financing options to choose the financing method that best suits the company’s development stage and financial situation.

11.3 Special taxes on multinational enterprises

For start-ups with cross-border operations, tax issues can become more complex. First of all, companies need to understand and comply with the tax regulations of the country where they do business, which may involve multiple tax types, such as corporate income tax, value-added tax, customs duties, etc. Secondly, cross-border operations may face transfer pricing issues, that is, how to reasonably allocate profits to subsidiaries in different countries. The Japanese tax authorities attach great importance to transfer pricing issues, and companies need to establish reasonable transfer pricing policies and retain relevant documents. In addition, Japan has signed double taxation avoidance agreements with many countries. Entrepreneurs should understand the contents of these agreements to legally reduce the tax costs of cross-border operations. Considering the complexity of cross-border taxation, it is recommended to hire professionals who are familiar with international taxation to help formulate reasonable cross-border tax strategies to ensure the company’s global tax compliance while optimizing the overall tax burden.

Future Outlook and Conclusion

12 .1 Japan’s innovation funding policy trends

Japan’s innovation funding policy is undergoing a major shift, mainly influenced by the “Society 5.0” strategy. This strategy aims to solve social problems facing Japan, such as population aging and labor shortages, through digital transformation and innovative technologies. Against this background, the Japanese government is increasing investment in innovation, especially in areas such as artificial intelligence, the Internet of Things, and big data. At the same time, the post-epidemic era has also brought about the need for policy adjustments. The government is paying more attention to improving the country’s technological autonomy and supply chain resilience, which may lead to more funds flowing into key technology research and development and localized production. In addition, in order to stimulate economic recovery, it is expected that more policy measures will be introduced to support the innovation of small and medium-sized enterprises. Entrepreneurs should pay close attention to these policy trends to better grasp future funding support opportunities.

12 .2 Opportunities in emerging technology fields

The emerging technology sector is bringing huge opportunities to entrepreneurs. Artificial intelligence and machine learning technologies are being widely used in various industries, from manufacturing to financial services, and have huge potential for innovation. Clean energy technology is also a rapidly developing field. As Japan strives to achieve its carbon neutrality goal, related technologies such as hydrogen energy and advanced battery technology will receive more attention and investment. The fields of biotechnology and healthcare are also full of opportunities, especially in areas such as personalized medicine, gene therapy and digital health. These emerging fields are not only expected to receive more innovative financial support, but may also become important engines for future economic growth. Entrepreneurs should pay close attention to the development trends in these fields and think about how to combine their own innovative ideas with these technologies to create competitive products or services.

12 .3 Recommendations and key points review for enterprises

For businesses seeking innovative funding, developing a long-term funding planning strategy is critical. This not only includes current financing needs, but also takes into account the company’s development plans and possible capital needs in the next few years. At the same time, the combination of technological innovation and business model innovation is also the key to corporate success. It may be difficult to translate pure technological breakthroughs into market success, and companies need to think about how to fully leverage technological advantages through innovative business models. Review the key points of innovative funding applications, including a clear business plan, a strong team composition, a clear market positioning and a reasonable fund use plan, etc., which are all important factors in obtaining financial support. In addition, companies should also pay attention to establishing a good reputation and fund usage record, which will help with continued financing in the future.

12 .4 Looking to the future: continuous learning and adaptation

In a rapidly changing innovation environment, continuous learning and adaptability are critical to the long-term success of your business. We encourage companies to actively participate in Japan’s innovation ecosystem, including participating in industry exchange events, collaborating with research institutions, and joining innovation incubators. This not only helps to obtain the latest industry information and technology trends, but also expands the company’s network and creates more opportunities for future development. At the same time, business leaders need to cultivate a culture of continuous learning and encourage employees to constantly update their knowledge and skills to adapt to the rapidly changing market environment. Finally, seizing innovation opportunities and achieving sustainable development is the ultimate goal of every enterprise. This requires companies to consider social and environmental factors while pursuing economic benefits, and strive to become responsible innovators. Through continuous innovation and adaptation, companies can not only obtain more financial support, but also stand out in the fiercely competitive market and achieve long-term sustainable development.