2024.4.26
Column
The association is working to improve Japan’s angel investment environment and support the growth of startups. We will continue to disseminate various information related to angel investment, including activity reports, latest news, and reports on pitch events, on a monthly basis.
On January 31, 2024, the 9th “Kansai Angel Pitch” was held at Kobe Anchor. This time, we bring you a column by Representative Director Toshiyuki Yamamoto.
I was born and raised in Neyagawa City, Osaka Prefecture. Currently living in Kyoto, I feel a strong attachment to the Kansai region. I believe that Kansai has its own unique charm and strengths, and I’m passionate about highlighting these aspects and involving Tokyo more in the Kansai spirit.
Don’t you think that “Kansai” holds great potential for business?
Let’s take a look at the GDP rankings of each prefecture in 2019. While Tokyo is dominant, Osaka Prefecture’s GDP is about one-third of Tokyo’s.
*Based on data created by ELENIMIST based on the prefectural gross product (production side, items) announced by the Cabinet Office (unit: million yen)
Even though about 60% of the angel investors in the “Power Angels” community I run are based in Tokyo, when it comes to the actual number of startups that receive investment and the total investment amount, it feels like it’s less than one-tenth of Tokyo’s activity.
In Kansai, we hold angel pitches regularly, but the reality is that equity-based fundraising is quite challenging here, to the point where one might wonder if there are any angel investors in Osaka at all. Despite the economic potential, it’s difficult for significant startups to emerge.
Tokyo startups often pursue equity fundraising, digging into deficits while aiming for growth through exits. On the other hand, many young entrepreneurs in Kansai opt for conservative management, seeking profitability by borrowing from banks (a method known as “debt fundraising”).
Entrepreneurs in Kansai often view Tokyo startups as aggressively fundraising even when not profitable, while they themselves maintain a more prudent approach. While this may partly be attributed to differences in business culture, the primary issue lies in the lack of an environment conducive to equity fundraising and difficulty in connecting with investors. This is a challenge that needs to be addressed.
I was approached by individuals from the Kansai region who had established an angel community centered around Nagoya called “NAC” (Nagoya Angel Community) and were hosting pitch events for angel investors. They expressed interest in replicating the initiative in Kansai, which led to the formation of the “Kansai Angel Community (KAC)”.
Collaborating with “Power Angels,” which I represent, and “BAMBOO INCUBATOR,” a professional group providing startup-focused support in the Kansai area, NAC took the lead in operating KAC. Initially, we held invitation-only pitch events primarily in Osaka, but the eighth edition took place in Kobe. Additionally, plans are underway to expand into the Chugoku region, giving rise to the “Setouchi Angel Community (SAC).”
This model of locally-oriented angel communities is proliferating, with initiatives emerging in various regions across Japan, including Tohoku, Hokuriku, Kyushu, and others. We believe that nurturing such grassroots angel communities will foster an environment conducive to the emergence of innovative startups from each region.
Toshiyuki Yamamoto, representative director, giving a greeting from the organizer
The “Kansai Angel Pitch” held on January 31, 2024, featured a panel discussion with Mr. Yabuno, CEO of the publicly listed company Cookbiz, who has ties to Kobe. The panel included myself, Mr. Chiba from BAMBOO INCUBATOR, and Mr. Yabuno. Following the discussion, four startups from the Kansai region pitched their ideas, followed by a networking session.
One of the key focuses when planning pitch events for me is creating an environment conducive to investment during the networking session. It’s rare for an investment decision to be made solely based on a 5-minute pitch. Investors need to delve deeper into details such as financials, future plans, and the personality of the entrepreneur. Similarly, entrepreneurs need to understand the investment history and background of potential angel investors.
At the Kansai Angel Pitch, we have angel investors give a 30-second self-introduction about their investment history and main business. Then, we provide different colored name tags for entrepreneurs, investors, and supporters, facilitating targeted conversations during the networking session. This approach often leads to concrete investment discussions during the event, with investments materializing frequently. Once a decision is made, the expert team at BAMBOO INCUBATOR assists with various procedures, ensuring a smooth process.
In Japan, it’s uncommon to have events where the majority of participants are angel investors, but through continuous improvement, we aim to expand this model nationwide.
Thank you.
Commemorative photo with participants of the 8th Kansai Angel Pitch
The Japan Angel Investors Association is currently seeking “Angel Members” for angel investors and “Partner Members” for municipalities, companies, and organizations supporting startups. Membership fees are free of charge. Why not join us in supporting the growth of startups together?
More details are available here →https://j-angel.jp/
