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Could this situation create an opportunity for North American VCs to fund Japanese startups? Obviously it would be a lot more logistically difficult than worki

Could this situation create an opportunity for North American VCs to fund Japanese startups? Obviously it would be a lot more logistically difficult than working domestically, and would presumably carry a number of new risks, but if it's really that bad, presumably you could give significantly more lucrative opportunities as well. (And I assume for the startup, the details of getting a bank account and such would be easier if you've already got a pile of capital ready to put in it...)

lmm 11y ago
Maybe. But you'd be funding people to live in the most expensive country in the world and where there's hardly any startup infrastructure. Even if you have funding, can you rent an office? Can you furnish it without paying for 100 people's worth of office furnishing? If there's a hardware element, are there businesses that will produce a prototype quickly? Can you recruit people? What are you going to do about series B/C/D, fly back to the US for a few months each time? Not to mention that the most driven entrepreneurs will be willing to move.
- pixelcort 11y ago
  True, but look at the exchange rate: $1 is now ¥118, so if you can overcome those obstacles, you can stretch the value of that money a bit extra.
- nandemo 11y ago
  Exaggerate much? Tokyo might not have the SV's startup "scene" but apart from funding, it has pretty much all infrastructure a software startup needs, just like any large city in a developed country does: fast, reliable internet connection, a functioning legal system, and enough qualified labor. Generally speaking, Tokyo is considerably cheaper than San Francisco or NYC at the current exchange rate (rather, at the exchange rate of the past 2 years or so). Crucially, salaries are much lower, and compensation is often the bulk of expenses in software startups.
  - saint_fiasco 11y ago
    It might be hard to find enough qualified labor because unemployment is so low and people are very reluctant to switch employers.
  - lmm 11y ago
    > Tokyo might not have the SV's startup "scene" but apart from funding, it has pretty much all infrastructure a software startup needs, just like any large city in a developed country does: fast, reliable internet connection, a functioning legal system, and enough qualified labor. I was trying to pre-empt "San Francisco is just as expensive as Tokyo". Yes it is, but it has a lot of startup-specific infrastructure that may (or may not) be worth the excess cost. (Likewise NYC/London/Berlin). If you just want the things you list, you can go somewhere much cheaper than Tokyo (e.g. central US, northern/western Europe - as you say, any large city in a developed country will do).
    - nandemo 11y ago
      > If you just want the things you list, you can go somewhere much cheaper than Tokyo (e.g. central US, northern/western Europe - as you say, any large city in a developed country will do) Right, I'm not claiming Tokyo is the best place for startups. Just that there's an investment opportunity (I was going to say "arbitrage" but that's too strong as it implies risklessness).
      - lmm 11y ago
        True up to a point, but I'd expect Tokyo to be bottom of the list for an investor, after all of the cheaper large cities in developed countries.
  - tptacek 11y ago
    This would be a better comment without the snarky first sentence.
    - nandemo 11y ago
rodgerd 11y ago
> Could this situation create an opportunity for North American VCs to fund Japanese startups? North American VCs don't even want to fund startups in the "wrong" part of the United States and at least one thinks CEOs can't have "foreign-accented English". What on earth about that suggests they'd leap into the Japanese market?

lmm 11y ago

Maybe. But you'd be funding people to live in the most expensive country in the world and where there's hardly any startup infrastructure. Even if you have funding, can you rent an office? Can you furnish it without paying for 100 people's worth of office furnishing? If there's a hardware element, are there businesses that will produce a prototype quickly? Can you recruit people? What are you going to do about series B/C/D, fly back to the US for a few months each time? Not to mention that the most driven entrepreneurs will be willing to move.

pixelcort 11y ago
True, but look at the exchange rate: $1 is now ¥118, so if you can overcome those obstacles, you can stretch the value of that money a bit extra.
nandemo 11y ago
Exaggerate much? Tokyo might not have the SV's startup "scene" but apart from funding, it has pretty much all infrastructure a software startup needs, just like any large city in a developed country does: fast, reliable internet connection, a functioning legal system, and enough qualified labor. Generally speaking, Tokyo is considerably cheaper than San Francisco or NYC at the current exchange rate (rather, at the exchange rate of the past 2 years or so). Crucially, salaries are much lower, and compensation is often the bulk of expenses in software startups.
- saint_fiasco 11y ago
  It might be hard to find enough qualified labor because unemployment is so low and people are very reluctant to switch employers.
- lmm 11y ago
  > Tokyo might not have the SV's startup "scene" but apart from funding, it has pretty much all infrastructure a software startup needs, just like any large city in a developed country does: fast, reliable internet connection, a functioning legal system, and enough qualified labor. I was trying to pre-empt "San Francisco is just as expensive as Tokyo". Yes it is, but it has a lot of startup-specific infrastructure that may (or may not) be worth the excess cost. (Likewise NYC/London/Berlin). If you just want the things you list, you can go somewhere much cheaper than Tokyo (e.g. central US, northern/western Europe - as you say, any large city in a developed country will do).
  - nandemo 11y ago
    > If you just want the things you list, you can go somewhere much cheaper than Tokyo (e.g. central US, northern/western Europe - as you say, any large city in a developed country will do) Right, I'm not claiming Tokyo is the best place for startups. Just that there's an investment opportunity (I was going to say "arbitrage" but that's too strong as it implies risklessness).
    - lmm 11y ago
      True up to a point, but I'd expect Tokyo to be bottom of the list for an investor, after all of the cheaper large cities in developed countries.
- tptacek 11y ago
  This would be a better comment without the snarky first sentence.
  - nandemo 11y ago

rodgerd 11y ago

> Could this situation create an opportunity for North American VCs to fund Japanese startups? North American VCs don't even want to fund startups in the "wrong" part of the United States and at least one thinks CEOs can't have "foreign-accented English". What on earth about that suggests they'd leap into the Japanese market?