VC Growth Funding and VCRHs Revision Discussed

The meeting was held on June 18, 2026, and the Financial Services Agency, the Ministry of Economy, Trade and Industry, and the Japan Venture Capital Association (JVCA) reported on the market environment, policies, and industry initiatives surrounding VC.

Startup fundraising in Japan has stagnated, and the gap with the United States is widening. Domestic VCs were described as concentrated on early-stage investment, with more limited institutional funding, large funds, and later-stage investment than in the United States.

The meeting shared a direction to enhance the VCRHs as flexible guidelines for dialogue between GPs and LPs, rather than regulations or obligations, and to make VC an attractive asset class.

Strengthening the provision of growth funding could support the growth of the Japanese economy and the domestic ecosystem by enabling startup scale-ups and the formation of large-scale transactions.

Advancing fiduciary duties, compliance, conflict-of-interest management, and fair value measurement could reduce unexpected losses for LPs and increase trust in domestic VCs and transparency in investment decisions.

Expanding exit options to include not only IPOs but also M&A, secondaries, and continuation funds could make it easier to recover capital and support growth in line with the business characteristics of long-term development models and deep-tech companies.

The secretariat proposed adding fiduciary duty provisions requiring investors to understand not only the future prospects of portfolio companies' businesses but also their management conditions, including accounting practices, legal compliance, relationships with antisocial forces, and cybersecurity. The proposal also cited the use of external expertise and interviews with business partners when necessary.

The proposals included establishing harassment prevention rules, training, and consultation services; examining conflict-of-interest risks when operating multiple funds; and holding discussions among GPs, LPs, audit firms, and others to create a collection of fair value measurement case studies.

The investment policy should clarify and explain to LPs strategies for differentiation from other asset classes and VC funds, while reasons should be explained when policies are changed in response to environmental changes. Investment contracts should be discussed and reviewed according to the portfolio company's growth stage and governance maturity.

Portfolio company support covered the recruitment of management talent, business strategy, industry networks, overseas expansion, and M&A. However, the support provided will depend on the VC's strategy and the portfolio company's preferences, reflecting consideration for diverse VC strategies. After entrusting the final decision to the chair, the draft revision is scheduled to be published promptly and finalized after a public comment process.