The startup condition in Japan 5
In the startup condition in Japan 4, we looked into fast-growing startup companies. The white paper also shows the detail about startup firms with stable growth rates.
So, today let’s see the way of funding that they applied and their needs for human resources.
The way of funding that stable growth startups applied in different stages
(Seed)
| 1 | 2 | 3 | 4 | 5 | |
| The way of funding applied (n: 677) | One’s own fund (82.3%) | Family, relatives, friends (39.3%) | Private financial institutions (39.3%) | Governmental financial institutions (28.2%) | Public subsidies (12.6%) |
| The way of funding that entrepreneurs wanted to apply (n: 179) | Private financial institutions (45.3%) | Governmental financial institutions (41.3%) | Public subsidies (36.9%) | VCs, funds, etc (34.6%) | Private enterprises, foundations and other institutions (31.8%) |
(Early Growth)
| 1 | 2 | 3 | 4 | 5 | |
| The way of funding applied (n: 646) | Private financial institutions (72.9%) | One’s own fund (46.4%) | Governmental financial institutions (40.9%) | Family, relatives, friends (22%) | Public subsidies (19.8%) |
| The way of funding that entrepreneurs wanted to apply (n: 126) | Public subsidies (44.4%) | Private enterprises, foundations and other institutions (43.7%) | VCs, funds, etc (42.9%) | Individual investors (39.7%) | Cloud funding (38.1%) |
(Stable Expansion)
| 1 | 2 | 3 | 4 | 5 | |
| The way of funding applied (n: 546) | Private financial institutions (78.4%) | Governmental financial institutions (42.6%) | One’s own fund (40.2%) | Public subsidies (22.9%) | Family, relatives, friends (13.8%) |
| The way of funding that entrepreneurs wanted to apply (n: 110) | VCs, funds, etc (44.5%) | Cloud funding (44.5%) | Public subsidies (42.7%) | Private enterprises, foundations and other institutions (40.0%) | Individual investors (37.3%) |
While their businesses grow stably, needs for funding change from
borrowing → public subsidies → investments from VCs and others
However, still in reality, they have to either support themselves financially or get secured loans, which must make them hesitate to take risks.
Types of human resources that stable growth startups need in different stages
After early growth period, needs for various human resources rise significantly.
In particular, we can see massive increases in human resources that might affect their track records such as corporate planning and successor to manager.
For instance, the rate of “successor to manager (CEO) goes up to 55.9% (Stable Expansion) from 9.7% (Seed).
This point is very similar to fast-growing startup firms. If you’re thinking about starting up new businesses in Japan, it’s better for you to pay your attention to this point all along.
As I discussed before, Japan has faced a severe shortage of labor. and generally speaking Japanese people prefer to work at established enterprises.
Therefore, we can expect to struggle with securing capable human resources at the end of the day.
Source: MUFJ Research & Consulting
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