Our association is dedicated to improving the angel investment environment in Japan and supporting the growth of startups. We will be sharing various information related to angel investing, including activity reports, latest news, and reports on pitch events, on a monthly basis.

We are pleased to announce that our Executive Director, Toshiyuki Yamamoto, has recently published his sixth book, titled ‘Angel Investor’s Practical Bible.’ While he has previously discussed topics from both the perspective of entrepreneurs and investors, this book focuses solely on angel investing, making it a comprehensive guidebook for angel investors.

The essence of being an angel investor

— Please tell us about the characteristics and commitments of this book.

Yamamoto: This book covers everything from the basics of angel investing to how to identify entrepreneurs and how to engage with them after investment. While there are many how-to books on angel investing, I believe this book is the first to focus on “supporting investors.”

Many people think that finding good entrepreneurs and being able to invest in their companies are the keys to success. However, I want to emphasize that it’s not just about that. By providing the knowledge, networks, and experiences that angel investors possess, we can increase the success rate of our investments.

When thinking about “What is my value as an investor?” and “Should I be the investor myself?” when making investments, you can find something that you can give back in some way. I want people to realize that helping and making entrepreneurs happy can be a significant source of fulfillment for investors.

Sharing my own failures is because I want to increase the probability of success.

— I also had the privilege of reading the manuscript in advance, and I must say, the chapter on “Do Not Invest in These Types of Entrepreneurs” was quite impactful.

Yamamoto: Yes, I wrote about my own past failures with the awareness that it might stir up some controversy. Having invested in 70 companies over 10 years, I believe I have insights to share, explaining in detail where the pitfalls lie.

Angel investing is such that you don’t immediately know whether it’s a success or failure. The feedback about whether a decision was good or bad comes years later. So, being able to share the failures I’ve learned over 10 years before making an investment is truly valuable information .

— I felt that the price of the book was a bit high, but when I considered the amount of loss it could prevent, it’s overwhelmingly cheap!

Yamamoto: Actually, this book will not be available in bookstores. Books that are placed in bookstores need to have a certain expected circulation, and it’s difficult for a book in a slightly niche area like “angel investing” to meet that requirement.

I’ve published five books before this one, but I had to focus more on content that would appeal to the general public rather than what I really wanted to write about. By gradually building up trust and credibility, I’ve reached a point where I can include 100% of what I want to write about in this book.

It’s similar to how celebrities are characterized. Like, “Let’s go with the silly character,” “Let’s make them from the ○○ star,” or “Let’s make them the angry character,” and the agency (publisher) sets it up.

This might be a turning point for Toshiyuki Yamamoto, transitioning from being the “entrepreneur” who founded Chatwork to being the “angel investor.”

Genres Not to Invest In

— Let me share a little snippet from the book that caught my attention.

Do Not Invest in These Genres（P 088）

When it comes to angel investing, it’s crucial to thoroughly assess entrepreneurs. However, investing in genres or markets where even exceptional entrepreneurs might not stand a chance, such as creating a search engine to compete with Google or an alternative social media platform to rival Facebook, can be a risky gamble.

While caution is needed when considering angel investments in the genres I’m about to introduce, if you have expertise or experience in the industry, it might still be a viable option. This information is primarily intended as a reference for novice angel investors.

– Trends and Buzzword-Based Ventures
– Hardware and Deep Tech
– Social Networking Services (SNS)
– Sports, Music, Art-related Ventures
– Services Targeting Students
– Ventures Aimed at Changing Culture and Values
– Beauty and Health-related Ventures
– Industries Combining Youth and Conservatism
– Business Models Dependent on Advertising
– Genres with No Competition

※ Each category is explained in detail. For more information, please refer to the book.

Excerpt from the book “Genres in which you should not invest”

To all those interested in angel investing

— Who do you want to pick up this book?

Yamamoto: I want everyone who is interested in angel investing to pick up this book, but especially those who have never done angel investing before. For those who might be hesitant and wonder, “Can I really do angel investing?” I hope that reading this book will give them the courage to take that first step and think, “Alright, let’s give it a try.”

Furthermore, professionals and those organizing accelerator programs may find the section on “What is an Entrepreneur?” extremely useful.

The other day, while speaking with someone from the Chamber of Commerce, the conversation turned to business owners who seem to constantly buy new cars whenever it’s time for financial statements. I believe individuals like that would benefit greatly from trying angel investing on a personal level.

Taking action is crucial

— Finally, could you please share a message?

Yamamoto: When starting something new, many people begin by gathering information—reading related books, watching YouTube videos, and so on. However, even with a large amount of input, you won’t necessarily become capable of doing it.

Just as studying theory at a driving school alone won’t make you a good driver until you actually drive on the road, investing requires hands-on experience. It’s full of things you won’t understand until you actually try it, as investment is heavily influenced by the current situation and the times.

In romance, at least dating two to three people is necessary to truly assess whether someone is compatible as a marriage partner.

Have the courage to take the first step and try “investing.”

Don’t pour a large sum like 10 million yen from the outset. Start by investing in about 3 to 5 companies within the range of 1 to 5 million yen.

When you’re unsure or in a bind, revisiting this book should provide some guidance to help you find a solution.

The Japan Angel Investors Association is currently recruiting “Angel Members” for angel investors and “Partner Members” for municipalities, companies, and organizations supporting startups. Membership is free. Why not join us in supporting the growth of startups together?