Current status of business start-ups and their challenges in Japan

Abstract

The aim of this paper is to clarify the status of business start-ups and their finance. By comparing five samples of start-up firms obtained from four surveys, we find differences in the types of start-up firms and in their financing of initial funds. In particular, although most start-up firms depend on personal funds of the founders, there are differences in the degree of the dependence and in the manner they use other sources of finance. We also find that firms facing financial constraints are minority, but the ratios of such firms differ across the samples. We detail these and other findings and derive policy implications to deal with challenges in business start-ups in Japan.