Investors choking startups with purse strings: Japan watchdog

Share-purchase rights abused most, Fair Trade Commission says

Japan Fair Trade Commission Nikkei 20201125

In a survey of more than 1,400 startups, the Japan Fair Trade commission found many complaints that large investors sought special favors, such as free access to intellectual property.

Nikkei staff writers

TOKYO -- The Japan Fair Trade Commission, the country's competition regulator, says big Japanese companies often make unreasonable demands of the startups they invest in, including free access to intellectual property, possibly violating antitrust laws.

In November 2019, the Japan Fair Trade Commission launched a fact-finding survey to investigate whether investors such as large companies and venture capitalists impose unreasonable conditions on startups in return for cash. It sent out questionnaires to more than 1,400 startups, and interviewed investors and experts, to draw up a forthcoming report.

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