## Riding Unicorns: Startups and Venture Capital in Japan

_IMF Working Papers, December 6, 2024_

## Source details

**Canonical URL:** [Riding Unicorns: Startups and Venture Capital in Japan](https://www.imf.org/en/publications/wp/issues/2024/12/06/riding-unicorns-startups-and-venture-capital-in-japan-559169)

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## Bibliographic details
- Authors: Salih Fendoglu, TengTeng Xu
- Published: December 6, 2024
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400294518.001

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### Overview
- The startup ecosystem in Japan has seen gradual growth, supported by the government’s "Startup Development Five-Year Plan" and significant interest from overseas venture capital.
- The paper lays out the startup financing ecosystem in Japan, compares it to international peers, and studies potential drivers of startup financing and their relevance for startups’ performance.
- Research is presented at both the country-level (aggregate analysis) and the firm-level.

### Key findings (country-level aggregate analysis)
- Firm dynamism and entrepreneurship play a critical role in supporting capital investment and firm valuations.
- Cross-country comparisons highlight Japan’s gradual ecosystem growth relative to international peers.

### Key findings (firm-level analysis)
- Equity funding helps startups:
  - innovate,
  - grow,
  - successfully exit.
- The impact of funding on the likelihood of a successful exit appears to be higher in cultures that seem to reward risk taking.

### Subject areas and keywords
- Subject: Development, Development strategy, Financial markets, Initial public offering, Labor, Self-employment
- Keywords: Development strategy, firm dynamics, funding affect startup performance, Global, helps startup, Initial public offering, Japan, Self-employment, startup ecosystem, startup financing, Startups, TengTeng xu, venture capital

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## Content in this bundle

- **Working Paper**
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  - [Working Paper (PDF)](/-/media/files/publications/wp/2024/english/wpiea2024246-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2024/12/06/riding-unicorns-startups-and-venture-capital-in-japan-559169_