1

　

　

Summary of Venture Capital

Year Book 2000

Professor Yasuyuki HAMADAHokkaido UniversityJuly 2001

　　　　　　　　平成１３年３月２９日

2

The Summary of the Questionnaire Survey

Response Rate 　７０．８％　－ 131 of 185 Companies Responded.　－ Among Them the Valid Response

about the Situation of Venture Capital Investment Amounted to 120.

The Period of the Questionnaire　－ In Principle, From July 1, 1999 to June 30, 2000

3

Contents of Questionnaire Results

The Situation of Investment by Venture Capital (Capital under Management and the Amount of Investment throughout a Year) The Situation of Establishment of FundsInvestors in Venture Capital FundsVenture Capital Investment StageExits for Venture Capital InvestmentInvestment by SectorsInvestment by Geographical Area

4

Capital under Management

　

June 1999 　　 775.7 billion Yen 　 (Corporate Venture Investment: 425.5, Venture Fund Investment: 350.2)　　　　　　　　　　　　　　↓

June 2000 　　 815.5 billion Yen （ Corporate Venture Investment: 433.2, Venture Fund Investment: 382.4 ）　［ 5.1 ％ Increase (Corporate 1.8 ％ , Fund 9.2 ％ ) ］

・ Increased the Share of Investment by Venture Fund Investment: 45.1 ％→ 46.9 ％ ・ The Number of Invested Companies Amounted to 16,959 or 4.7% increase.Note) The Amount of Loan Amounted to 51.4 billion Yen or 20.5% decrease.

5

Changes in Capital under Management

8,258

9,193

8,391

7,7578,155

7,695

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

1996.3 1997.3 1998.3 1999.3 1999.6 2000.6

100 million Yen

Note) Data from March 1996 to March 1999 taken from Venture Capital Investment Survey by the Venture Enterprise Center.

6

Corporate Venture Investment versus Venture Fund Investment (based on capital under management)

2,835 3,065 3,092 3,198 3,502 3,824

5,423 6,128 5,299 4,497 4,255 4,332

47%45%42%

37%33%34%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1996.3 1997.3 1998.3 1999.3 1999.6 2000.6

Corporate (100 million yen)Fund (100 million yen)

Note) Data from March 1996 to March 1999 taken from Venture Capital Investment Survey by the Venture Enterprise Center.

7

Changes in Capital under Management for Japan, US, EU

8,258 9,193 8,391 7,695 7,757 8,155

39,400

46,400

61,700

89,500

134,500

58,350

40,594

32,78527,28625,108

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

1995 1996 1997 1998 1999 2000

100 million yen

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

million $million Euro

Japan(100 million yen)

US(million $)

EU(million Euro)

(Source) Figures for the US come from the 2000 National Venture Capital Association Yearbook (Prepared by Thomson Financial Securities Data/Venture Economics). The figures for Europe come from the 2000 Yearbook (European Private Equity & Venture Capital Association). The figures for Japan for 1995 to 1999 are from Venture Capital Investment Survey by the Venture Enterprise Center. Data for 2000 is from the survey of the most recent year ending in June, but the data for 1995 to 1999 is for the relevant fiscal year.

8

July 1999-June 2000 　　 230.1 billion yen/year

　 (Corporate 100.4, Fund 129.7 billion yen) 　　　　　

〔 Reference 〕 99% Increase in Simple Comparison with the Data in 1998 Fiscal Year by VEC Investigation

April 1998-March 1999 　 115.7 billion yen/year （ Corporate 61.3, Fund 54.9 billion yen ）

・ The Share of Venture Fund Investment: 56.3%（ 47.4% in the Investigation in 1998 Fiscal Year ）・ The Amount of Investment per Portfolio Company: Corporate 55.1, Fund 74.9 million yen(Corporate 44.6, Fund 58.9 million yen in 1998 Fiscal

Year)

The Amount of Investment throughout a Year

9

Changes in Capital Disbursement (initial and follow-on investment)

1,5111,644

2,004

1,157

2,301

2,427

0

500

1,000

1,500

2,000

2,500

3,000

1995 1996 1997 1998 1999 2000

100 million yen

(Note) Data for 1995 to 1999 taken from Venture Capital Investment Survey by the Venture Enterprise Center. Data for 2000 is from the most recent year ending in June, but data for 1995 to 1999 is for the relevant fiscal year.

10

Corporate Venture Investment versus Fund Investment (Based on initial and follow-on investment and capital

under management)

45.1% 46.9%56.3%

54.9% 53.1%43.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

June 1999 Capitalunder Management

June 2000 Capitalunder Management

Initial and Follow-on Investment(July 1999 to June 2000)

Corporate

Fund

11

Fund versus Corporate Venture Investment per Portfolio Company (Capital under management/initial and follow-on

investment)

6,2646,067

7,491

4,013 4,065

5,511

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

10 thousand yen FundCorporate

June 1999 Capitalunder Management

June 2000 Capitalunder Management

Initial and Follow-on Investment(July 1999 to June 2000)

12

Changes in Per-Portfolio Initial and Follow-on Investment (Fund versus corporate venture investment)

5,510

7,490

5,690

4,790

4,460

5,890

4,100

5,840

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

96/4 ～ 97/3 97/4 ～ 98/3 98/4 ～ 99/3 99/7 ～ 00/6

10 thousand yen

Per-portfolio initial and follow-on investment (corporate)

Per-portfolio initial and follow-on investment (fund)

(Note) Data for 1996 to 1998 taken from Venture Capital Investment Survey by the Venture Enterprise Center.

13

Changes in Capital Disbursement for Japan, US, EU

1,511 1,644 2,427 2,3011,157

2,004

9,900

14,000

19,200

48,000

5,700

25,116

14,461

9,655

6,7885,546

0

10,000

20,000

30,000

40,000

50,000

60,000

1995 1996 1997 1998 1999 2000

100 million yen

0

10,000

20,000

30,000

40,000

50,000

60,000

million $million Euro

Japan (100 million yen)US (million $)EU (million Euro)

(Source) Figures for the US come from the 2000 National Venture Capital Association Yearbook (Prepared by Thomson Financial Securities Data/Venture Economics). The figures for Europe come from the 2000 Yearbook (European Private Equity & Venture Capital Association). The figures for Japan for 1995 to 1999 are from Venture Capital Investment Survey by the Venture Enterprise Center. Data for 2000 is from the survey of the most recent year ending in June, but the data for 1995 to 1999 is for the relevant fiscal year.

14

The Situation of Establishment of Funds

　　　　 Number of Funds 　 Amount of FundsJune 1999 　　　　 174 　　　　 526.9 billion yenJune 2000 　　　　 238 　　　　 715.4 billion yen

About Newly Established Funds from July 1999 to June 2000・ Number of Funds 64・ Sum of Funds 204.4 billion yen・ Average Amount of Funds 3.19 billion yen, or 73.99 millio

n yen per one fund (Both indicators became larger in comparison with 1998 FY investigation by VEC)

・ Number of Portfolio Companies per Fund 18.7 (It shows tendency to reduce)

15

Portfolio Companies per Fund and Disbursements per Portfolio

55.6

34.4

18.7

7,399

5,898

4,525

0.0

10.0

20.0

30.0

40.0

50.0

60.0

97/4 ～ 98/3 98/4 ～ 99/3 99/7 ～ 00/6

Number of Portfolio

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000Disbursements ( 10 thousand yen / company)

Number of portfolio companies per fund (left axis)

Average size of fund ： 2.56 billion yen 1.21 billion yen 3.19 billion yen

Capital disbursements per portfolio (right axis)

(Note) Data for 1996 to 1998 taken from Venture Capital Investment Survey by the Venture Enterprise Center.

16

Investors in Venture Capital Funds

Characteristics　 1. Investment by Pension Funds (6% Share)　 2. High Share of Foreign Investors (26% Share)　 3. Investment by Individual Investors (6% Share)〔 Reference 〕Share According to 1998 FY Investigation by VEC1. Pension Funds 0 ％ , 2. Foreign Investors 1%,3. Individuals 1 ％　

17

Investor Composition for Newly Established VC Funds (total)

(Funds established between July 1999 and June 2000, including general partners)

Securities Companies2.4%

Insurance Companies11.2%

Corporations19.8%

Individuals6.0%

Foreign Investors26.3%

Banks, Credit Unions/Associations17.6%

Others1.5%

Venture Capital Firms6.3% Pension Funds

5.6%

General Partners3%

18

Europe

Banks29.1%

Pension Funds18.7%

Corporate Investors9.5%

Private Investors6.2%

Not Available6.7%

Realized CapitalGains

7%

Government Agencies4.7%

Fund of Funds4%

Academic Institutions

0.4%

Capital Markets0.2%

Insurance Companies13.2%

(Source) 　 2000Yearbook (European Private Equity & Venture Capital Association)

Japan

Securities Companies2.5%

Insurance Companies11.6%

Corporations

20.5%

Individuals6.1%

Foreign Investors27.1%

Others1.6% Banks, Credit Unions/Associations

18%

Pension Funds5.8%

Venture Capital Firms6.5%

USCorporations

15%

Endowments & Foundations21%

Foreign Investors6%

Individuals & Families22%

Financial & Insurance13%

Pension Funds23%

(Source) 2000 National Venture Capital Association Yearbook (prepared by Thomson Financial Securities Data/Venture Economics)

19

Venture Capital Investment Stage

Characteristics　　 In Terms of Stage of Investment

Stage, Venture Capital Investment Is Moving toward the Earlier Stages.

　 Share of Investment to Companies at Start-up or in First 5 Years:

（ July 1998-June 1999 ）　 50%: （ July 99-June 00 ）　62%

　 Share of Investment to Companies over 15 Years Old:（ July 1998-June 1999 ）　 32%: （ July 99-June 00 ）　

12% 　

20

Initial and Follow-on Investments by Stage

1.3%

32.4%

11.6%8.5%

48.9%

8.9%11.3%

14.9%

3.0%

59.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Start-up Less than 5 yrs 5 yrs to less than 10 yrs 10 yrs to less than 15 yrs 15 yrs or more

1998/7-1999/6

1999/7-2000/6

21

Exits for Venture Capital Investment

Characteristics 1. Notable Increase in the Share of Initial

Public Offerings (IPO) Because of the Substantial Increase of the Number of Companies which Carried out IPO

2. Low Share of M&A in Spite of the Increase of its Number

3. The Number of Bankrupt Companies Remained Unchanged in Comparison with the Previous Year. Its Share Decreased from 36% to 20%.

22

Venture Capital Exits (based on no. of portfolio

companies)

125

259

106

107

50

140

24

13

0

100

200

300

400

500

600

1998/7-1999/6 1999/7-2000/6

No. of companies

OtherM&ABankruptcyIPO

23

Percent of Venture Capital Exits (based on no. of portfolio

companies)

42.5%48.9%

36.1% 20.2%

26.4%

4.5%

4.4%

17.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1998/7-1999/6 1999/7-2000/6

(Note) Valid replies from 53 companies. “Other” includes buy-backs by management.

OtherM&ABankruptcyIPO

24

Venture Capital Exits(based on realized profit/loss)

15.3

168.2

-2.2

0.5

1.4

-0.1

-20.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

1998/7-1999/6 1999/7-2000/6

100 million yen

OtherM&AIPO

(Note) Valid replies from 44 companies. “Other” includes buy-backs by management.

25

Investment by SectorsChanges in the Amount of Investment　 (98FY) (99FY) (00/Apr-Jun)Internet-related* 4.4% 15.0% 21.9%Computers-related* 24.1% 25.3% 12.4%Consumer-related 3.8% 10.4% 10.8%Semiconductors/Other Elect.* 26.4% 15.6% 8.7%Communications* 3.7% 3.9% 7.2%(Information Technology(IT)-related 4 sectors * total) (58.5% 59.9% 50.3%)Characteristics 1. Continuous increase in the share of the investment to sectors relate

d to Internet2. The decrease in the share of investment to sectors related to Intern

et in the last 3 months

26

Share of Investments by Industrial Sectors

-20%

0%

20%

40%

60%

80%

100%

-96/3 96/4-97/3 97/4-98/3 98/4-99/3 99/4-00/3 00/4-6

Other

Utilities

Transportation

Semiconductors/Other Elect.Internet-related

Medical/Health

Manufacturing

Industrial/Energy

Finance/Insurance/Real EstateConsumer-related

Construction

Computers

Communications

Business Services

Biotechnology

Agriculture/Forestry/Fishery

(Note) These amounts represent differences from the previous year for each sectors; negative values mean that the return was less than the investment.

27

IT-related Portfolio Companies

16.3%

25.6%

53.5%58.5% 59.9%

50.3%

83.7%

74.4%

46.5%41.5% 40.1%

49.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

-96/3 96/4-97/3 97/4-98/3 98/4-99/3 99/4-00/3 00/4-6

Not IT-relatedIT-related

28

Investment by Geographical AreaChanges in the Share of Investment　　　　　　　　　　　　　　（ 98FY ）　　 （ 99FY ）　　

（ 00/Apr-Jun ）　 Domestic 　　　　　　　　 53.0% 　　　　 70.8% 　　　　

71.5 (including Tokyo 　 　 22.2% 　　　　 35.7% 　　　　 32.1%)　 Overseas 　　　　　　　　 47.0% 　　　　 29.2% 　　　　

28.5%(including Asia-Pacific 37.1% 　　　　 23.7% 　　　　 22.8% ）Characteristics1. While the share of domestic (especially Tokyo) investment fro

m April 1999 to March 2000 increased in comparison with the previous year, investment to foreign countries decreased.

2. Investment is concentrated in Tokyo of domestic (50% of domestic investment in 1999 FY), and in Asia Pacific of overseas (81% of overseas investment in 1999 FY)

29

Investment by Geographical Area

0

100

200

300

400

500

600

700

800

900

1,000

97/4-98/3 98/4-99/3 99/4-00/3 00/4-6

億円

Overseas totalKyushu-OkinawaChugoku-ShikokuOsaka

Kinki (other than Osaka)Tokai-HokurikuTokyoKanto-Koshinetsu (other than Tokyo)

Hokkaido-Tohoku

30

Share of Investment by Geographical Area

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

97/4-98/3 98/4-99/3 99/4-00/3 00/4-6

Overseas totalKyushu-OkinawaChugoku-ShikokuOsaka

Kinki (other than Osaka)Tokai-HokurikuTokyoKanto-Koshinetsu (other than Tokyo)

Hokkaido-Tohoku