When he worked in Silicon Valley, venture investor James Riney was used to aggressive entrepreneurs who pitched him for financing any time they got a two-minute opening. Now that he’s in Tokyo, the culture is so different he’s changed his ways. Startup founders are so timid about asking for money that he decided to open his office a few hours each week to let them stop by and chat.

“We realized we had to create excuses for founders to contact us,” Riney said in an interview at his office near Tokyo Station. “We created office hours and said come ask us anything. They’ll be like, ‘Oh yeah, tell me about this thing. Oh and by the way, I need to raise money.’ “

Riney opened the Japan fund for 500 Startups, a fixture of Silicon Valley that made its name backing entrepreneurs just as they’re starting out. He’s looking to break into a local market that has been dominated by corporate venture investors, which he sees as one reason the country hasn’t had the breakout successes of the United States or China. Corporations were involved in 68 percent of venture deals in Japan in the first half, compared with 27 percent in the U.S., according to CB Insights.

Riney sees a host of problems in that approach. Corporate executives making venture investments tend to be bureaucrats who have only worked in large, stable organizations, playing it safe to protect their careers. Just as important, they have little incentive to take risks because they usually don’t get paid based on how their startups do.

“Corporate VCs are often salarymen and whether their investment succeeds or not doesn’t impact their salary,” said Riney, who began his career at JPMorgan Chase & Co. in Tokyo, quit to found a startup and worked for DeNA Co.’s corporate venture arm in Silicon Valley. That’s different from noncorporate VCs, who “put way more energy and lose a lot more sleep if these companies are not doing well.”

The firm 500 Startups is at the high-risk end of the venture business, even among U.S. firms. Founding partner Dave McClure began making angel investments with $300,000 he earned after his employer PayPal went public. He started 500 Startups in 2010 and has expanded to $200 million in assets with funds dedicated to Scandinavia, the Middle East and Latin America. Its website proudly proclaims: “Think you’re crazy? We are too.”

Riney sees opportunity for that kind of approach in Japan. With hardly any other early-stage foreign VCs in the country, he hopes 500 Startups can be first to unearth hidden gems and use its network to take them global, while helping foreign buyers find promising targets in Japan.

Since launching late last year, the fund is close to its target of raising $30 million from investors, including Mitsubishi Estate Co. and GungHo Online Entertainment Inc. founder Taizo Son. To date, the venture firm has invested between $100,000 and $500,000 in six companies, including virtual-reality software for civil engineers, a co-working space startup and a restaurant reservation app aimed at tourists.

Riney says the general investment criteria are simple: “Why this, why now and why you?” The fund, with five employees, doesn’t target specific areas, but Riney currently sees a lot of promise in VR for businesses and health care, where the loosening of the country’s regulations is creating opportunities. Besides that are startups that have carved out a niche by solving problems unique to Japan.

That includes Pocket Menu Co., which runs a restaurant app capitalizing on the nation’s ongoing tourism boom. The founder, a former chef, convinced his friends at Michelin-starred restaurants to allow bookings and payment through the app. Riney says global players such as OpenTable Inc. may struggle to displace him as many high-end restaurant owners in Japan are motivated more by relationships than economics, and because much of the back-end is done manually. “The user interface is this sexy app experience, but in the back there is someone sending all these faxes,” Riney said with a laugh.

With VR, he says the equipment is still prohibitively expensive for most consumers, but not for businesses. That’s the logic behind the investment in Dverse Inc., which created software that lets users design virtual buildings and landscapes, and then digitally shrink themselves to walk through their creations. “It has the potential to disrupt the user interface itself,” said Yohei Sawayama, a managing partner at Riney’s fund.

The founder of Dverse, Shogo Numakura, says having 500 Startups among his investors should make it easier to reach a global audience and establish partnerships once the product is launched next year. He also says being able to talk to someone who has first-hand experience starting their own company is a scarce luxury in Japan.

“Overseas, most VCs are former entrepreneurs themselves, but in Japan the majority are still the so-called salaryman VCs,” Numakura said. “Someone who comes from a startup background, their view towards the product is different, and the advice they can provide is unlike what others say.”

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