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Venture capitalist eyes new $300 million fund

by Mariko Yasu and Grace Huang

Bloomberg

Gen Isayama grew up in Tokyo and then spent a decade working in the venture-capital business in Northern California. Now he’s starting a $300 million fund aimed at blending the best of Silicon Valley and Japan.

The 40-year-old Isayama is chief executive officer of WiL LLC, which has tapped corporate investors including Sony Corp., Nissan Motor Co. and ANA Holdings Inc. to help finance its investments.

The firm plans to fund startups in Japan and technologies within the country’s established companies that have the potential to be standalone businesses, he said.

WiL’s approach is unusual in an industry dominated by Silicon Valley firms that tend to steer clear of big corporations that could slow them down in the hunt for breakthrough innovations.

Isayama sees an opportunity in giving Japanese companies a chance to commercialize technologies that may not otherwise get attention. He was planning to present his first potential investment targets to sponsors Tuesday at WiL’s Tokyo office.

“We said, ‘How can we unlock the asset sitting inside of, say, Sony, which will never get productized or just sits there as a patent or a prototype product?’ ” Isayama said in an interview in Tokyo. “That was the concept last summer when I left the previous job.”

The graduate of the University of Tokyo left his native Japan to get an MBA at Stanford University in the heart of Silicon Valley. After that, he joined Doll Capital Management Inc., eventually becoming a partner.

Sony invested in the fund in December, spokeswoman Mami Imada said, declining to specify the amount.

“We empathize with the gist of promotion, open innovation and incubation,” Imada said.

Innovation Network Corp. of Japan will invest as much as $100 million in WiL’s fund, the government-backed investment fund said earlier this month.

“This fund has the potential to offer creative collaboration, opportunities to interact with entrepreneurs, and access to new technologies in the future,” said Nissan spokesman Chris Keeffe.

Investments in Japanese startup companies totaled ¥102.6 billion in the year to last March, down from ¥193.3 billion five years ago, according to Venture Enterprise Center, a Tokyo-based industry group.

Big companies can play an important role in fostering startups in Japan, said Nobuyuki Idei, the former Sony chief executive officer who helped Isayama promote his fund.

“We don’t have angel investors here, but big corporations can play the role of providing long, patient risk money,” Idei said.

Prime Minister Shinzo Abe is setting a new rule providing tax benefits for firms that invest in venture capital funds, Isayama said.