Softbank Creates Seed Capital Fund for Japan Net Startups

Internet startups aiming towards an IPO are invited to express their interest to the ¥12.3 billion Softbank Internet Fund, managed by Soft Trend Capital. J. Goto, a director at the fund, is interested in hearing from any Internet company in Japan targeting a future listing on a Japanese or Asian market, or on the NASDAQ. Funding requirements are minimal, says Goto. The company should have good management who understand the Internet industry, especially in the U.S., and who understand the possibilities of the Japanese Internet scene.

Of course, a business plan or model would also help, says a Softbank spokesman. No limit has been set on the amount of funds available. Startups as well as firms seeking bridge financing are welcome to apply.

Starting the process, says Goto, is quite easy. Just send an e-mail expressing your interest to tanamo@softbank.co.jp or jgoto@softbank.co.jp (English is OK).

Since the fund's launch in August, one firm has received funding and another is in the process of applying, Goto says. Both firms are content-based. Softbank Corp. launched the fund to make a profit, added a company spokesman. "Our goals are not altruistic. But the fund should help develop Japan's Internet and venture capital markets-both things will be good for our business." Funds for the Softbank Internet Fund are coming from Softbank (¥1 billion), institutional investors, and Trend Micro.

Softbank launched two other large VC firms this summer, both U.S.-based. SP Capital partners ($1.2 billion) targets Net startups, and Tech Five (¥72 billion) provides funds to later-stage Internet companies. But the most vital fund is the Japan-based one. With NTT finally introducing fixed-fee pricing for access, Japan's Net market is certain to take off. But without companies ready to bound into the market, without companies with a bit of cash behind them to cushion the costs, Japan's online boom could fizzle.

Hopefully, Softbank's move will shake up Japan's moribund venture capitalists and make them realize that startups, especially Net-based startups, are a business model waiting to explode-and it is time the risk factorers found a way to manage such investments.