Venture Review

Article

Jinichiro Yamada
「Legitimizing Activity of Entrepreneurial Team against Uncertainties」

　In this article, we argue that entrepreneur’s legitimizing activities are important process for decreasing uncertainties in the process of organization emergence in the of an academic spin-off. In the prior research, (case ) external uncertainties are regarded as crucial influence for new venture survival in order to gain resources but we identified internal uncertainties are also important, especially at initial stages of the organization formation, for successful venture growth in our intensive single case study.
　Academic entrepreneurs’ team do not instantly establish a new firm, but create a series of action which includes various legitimizing activities in order to cope with uncertainties, and they could develop their business concept among stakeholders including the regional government officials and business partners. This character of strategic sociability in the business concept makes entrepreneurs possible to overcome the liability of newness in organization emergence. In the face of uncertainty, the coherent attitude and vision by founders based on their business concept evolve with the source of legitimacy such as norms, values, cognition that are socially connected with interpreting process of business opportunities.
　Our new conceptual framework not only shed lights on limitations of existing theories on academic entrepreneurship but also contributes to a deeper understanding of important issues on the industrial innovation and regional industrial policy in the view of social context.

Key words:Uncertainty, Legitimizing activity, Entrepreneurial team, Academic spin-offs, Strategic sociability

Tomoyo Kazumi
「The Effects of Work Experience on the Entrepreneurial Activities of Female Entrepreneurs」

　Female Entrepreneurs and business operators in Japan are generally not held in high regard.Prior studies concerning female entrepreneurs, such as Tamura(1995) and The National Life Finance corporation’s overall review(2003), indicate that enterprises launched by female entrepreneurs are generally smaller than those of their male counterparts and tend to be concentrated within specific industries – particularly the service industry, retail and restaurants.
　In recent years, however, new types of female entrepreneurs have emerged in Japan. They conduct business in areas such as not deferent with male entrepreneurs, and often go public with their own ventures. Many have experience in project management of management consulting, or have studied abroad.
　In order to clarify the relationship between entrepreneurial activities and work experience, I prepared a questionnaire survey and conducted a quantitative analysis based on the result. 3,000 enterprises with female president/founder were identified and questionnaires were sent by mail. I have got 303 valid responses.
　The main results of the estimation indicated some interesting tendencies. It has been found that longer periods of holding a managerial post and of being engaged in project management correspond to greater capital amount or number of employees, greater most-recent annual sales, and greater operating earning rates. The present study has shown the number of years’ experience in project management and holding a managerial post has positive effect on the size and relative success of business launched by female entrepreneurs in Japan.

Key words:Female Entrepreneurs, Business Scale, Expand Business, Work Experiences

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Article

Yoshihiro Eshima
「An Empirical Analysis of the Influence of External Resources to Small Business Management in Japan」

　This paper examines the relationship between external resources and management of technology-based small firms (TBSFs) in Japan from perspectives of the resource-based view and government support rationales.
　Based upon the data collected from 522 responses to a nation-wide survey of TBSFs in Japan, it is found that there was not a strong relationship between external resources such as government support and internal resources, recognition of business environment, corporate strategy and performance. The same results were shown for young TBSFs as well.
　Government support, however, shows positive impact to the progress of R&D activities and public relations in TBSFs. Furthermore, government support could fill in the information gap between firms and potential private investors.

Keywords:Resource-based View, Government Support, Corporate Strategy, Technology-based Small Firms,External Resources

Haruomi Shindo
「The Development Process of an Academic Spin-off」

　The research tries to construct the analysis frame of the entrepreneurial process of academic spin-offs. As a hypothesis, the research basically uses the frame which is presented by Shindo (2005). The frame by Shindo (2005) classifies the entrepreneurial process of academic spin-offs into the technology development process and the business development process. The technology development process is constructed by inventors, technological features, and intellectual properties. The business development process is constructed by entrepreneurs, business concepts and plans, and resources. There are entrepreneurial opportunities between the two processes. Government policies and research institutes influence over all of the processes.
　To proof the hypothesis, the research uses the single case of an academic spin-off named Grid Research Inc. The spin-off is established by the National Institute of Advanced Industrial Science and Technology (AIST) and the independent new technology based firm named Best Systems Inc.
　As the points of findings, at first, the research network and the business network influences the entrepreneurship of the academic spin-off. At second, the academic.industry relationship is based on the meta-network, which connects the research network and the business network. At third, by using the mating theory of search, the research succeeds to show the two way process for the business opportunities. The one of the process is from the technology development side and the other of the process is from the business development side.
　The research has the limits by using the research method of single case study. The research is expected to become robust by the triangulation, using the other research methods.

Key words:Academic Spin-offs, Entrepreneurship, Network, Mating Theory of Search, Academic-Industry Relationship

Hirokazu Hasegawa
「Venture capital returns in Japan」

　What factors contribute to improve the return (IRR) on investments in venture companies? This paper investigates the factors influencing return performance of investments in venture companies in Europe, Australia and the U.S. Further, this paper investigates the valuation of Japanese venture-backed companies that achieved IPOs from 1998 until 2002 at each round of pre-IPO financing in order to determine those factors contributing to enhanced IRR in Japan. It was found that the correlation between the percentage increase in valuation between the last financing before the IPO and the IPO valuation ,the times of following investments and investment performance was the highest of all factors investigated. On the other hand, factors such as whether the financing was syndicated, the level of valuation, had a negative correlation with IRR in Japan.

Key words:Japanese venture capital, internal rate of return (IRR), regression model, institutionally affiliated venture capital

Tetsuya Kirihata
「Creation of New Technology-Based Firms and Post-Investment Activities of Venture Capital Companies in Japan」

　In this paper, I analyze the support needs of New Technology Based Firms (hereafter, abbreviated “NTBFs”) and the post-investment activities of venture capital companies (hereafter, abbreviated “VCs”) in Japan based on the questionnaire survey and discuss the post-investment activities of VCs’ investment in NTBFs.
　The questionnaire reveals that the kinds of support needed by NTBFs can be classified into four factors: corporate strategy and motivation, advice and networking, financial and crisis management and recruitment. The questionnaire found that the type of support most needed by NTBFs is “corporate strategy and motivation”, followed by “advice and networking”, “recruitment”, and lastly, “financial and crisis management”. Among the seven kinds of support environments that were listed as being beneficial to the operations of NTBFs, the one most often cited was access to “manpower and talent” (professional managers and skilled employees)”. on the other hand, the type of support most provided by VCs was “advice and networking”, followed by “financial and crisis management”, “corporate strategy and motivation” and lastly, “recruitment”.
　It will be essential to improve business environment about “recruitment” in fostering NTBFs in Japan. Providing post-investment activities on “recruitment” may be an effective way for VCs to differentiate their support services for NTBFs.

Key words:New Technology Based Firms, Support Needs, Venture Capital Companies, Post-Investment Activities, Recruitment

Case Study

Kazuyuki Masuda
「Functions of the Venture Capitals Supporting the High-Tech Start-Ups」

　The characteristics of the Japanese venture capitals supporting the High.Tech Start-Ups are outlined. The functions of those venture capitals are then studied based on the questionnaires sent to the High-Tech Start-Ups backed by the venture capitals. The functions derived from the study are as follows.
(1)Team-up function
　The start-ups regard the venture capitals as the business partners. The personalities of capitalists, network and understanding capability of the technology are regarded important as Team-up function
(2)Scout Function
　Quality of technology, potential of business, quality and commitment of entrepreneur are regarded as important as Scout Function.
(3)Hatch function・Risk money
　Equity policy, business plan etc. are regarded important as Hatch function.
(4) Coach function
　Helping finance, reviewing business plan are regarded important as Coach function.
(5)Present situation
　There exists the difference of the quality among the venture capitals. And there exists the gap between the venture capitals’ ideal and their reality.

Key words:Start-Up, Venture, High Tech, Venture capital, Supporting the Start-ups

Katsuya Hasegawa
「Venture Capital as a Startup Service Provider」

　Hands-on management support by the venture capital firms plays important role in creating new businesses by the start-up companies. Venture capital firms provide hand-on management support since it is thought to be necessary for the venture capital firms in order to increase the value of the portfolio companies by not only providing the capital, but also providing other value-added supports to the portfolio companies. This is, however, based on the view point that the nature of the venture capital as an industry is one form of fund management business. In this paper, we will discuss the economical role of the venture capital industry based on the view point that the venture capital industry is basically one form of service provider to the entrepreneurs. We will analyze the profile of Silicon Valley venture capitalists and discuss about the two essential aspects of venture capital industry; fund management and business creation. We will conclude that the business creation role of venture capital is more fundamental than the fund management role. We will also discuss about the venture capital industry in Japan from this view point.

Key words:Venture capital industry, Venture capitalist, Silicon Valley, Fund management, Start-up support

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