Taiwan is highly evaluated in the activity of venture capital (VC) industry in the world. In the latter half of the 1990s, the VC sector supported the growth of the semiconductor and IT industries in Taiwan by pouring the substantial amount of idle money into them, which led to the rapid growth of the VC sector itself. However, after the 2000s, its hyper growth stage finished. In recent years, it was confronted with many problems such as rapid decline in the amount and number of investment, difficulty in raising money, weak appeal to foreign investors, insufficient investment in the early stage venture business, and so on. In this study, we try to examine three main topics, namely, (1) the historical trajectory of the development of the VC industry in Taiwan, especially, its contribution to the growth of high-technology industry after the 1980s, (2) difficulties with which the Taiwanese VC sector was confronted, especially, the cause of stagnation in recent years, and (3) the recent new situation (namely, the rise of angel investors and seed accelerators) and change in roles of the VC sector. Through such examination, we aim to understand the factor which influences the development of the VC sector and the result of public policy for facilitating this sector. In conclusion, it is clarified that the VC supporting policy in Taiwan is seen as (relatively) successful because she has followed text book lessons such as “the full use of private-sector and local resources” “long-term and appropriate commitment, and sufficient information supply to interested parties” and so on. In addition, it is also revealed that the rise and fall of the VC industry is closely connected with the development situation of industries which are the main destination of VC investment, and that the appropriate manner of VC activity varies according to the nature of target industries. For example, the recent stagnation of the VC sector in Taiwan is partly attributed to the fact that there seems no next-generation leading industries with very high growth potential, and to the fact that recent popular business sectors such as web business and the culture creative industry can be implemented with relatively small investment. The important success factor for these new popular sectors is sensitivity and quick response to market needs rather than large-scale and long-term capital investment. Angel investors and seed accelerators may be more suitable than conventional VC companies for such circumstances.

View full abstract

[in Japanese]

View full abstract