A Capitalist Who Witnessed the IT Bubble Collapse and the Lehman Shock: Reaching the "Entrepreneur First" Approach

Yuya Takegawa

CyberAgent Capital
Director, Partner

After working at a securities company and a recruitment agency, I began engaging in venture investment activities in 2004, investing in 12 startups including Full Speed, Light Up, StemCell Institute, and SafeArt. In 2007, I joined the IT venture company Knocking On, which supports digital marketing, and became CFO the following year. After an acquisition by a corporate company, I became CEO in 2010. In November 2012, I joined CyberAgent Capital. In December 2014, I launched a seed-focused fund, the Seed Generator Fund, and invested in 15 early-stage startups including Raivo, PETOKOTO, Backtech, and Gozal. My investment activities focus primarily on entrepreneurs in the seed stage. I graduated from Waseda University, Faculty of Letters. My hobbies include recreational baseball.

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Focusing on Seed Investments with an Entrepreneur-First Approach

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- Could you tell us about the investment domain, structure, and organization of CyberAgent Capital (CA Capital), the company you're affiliated with?

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CA Capital was established in 2006 and is currently managing its third fund, which is valued at 6 billion yen. The investment stage is primarily focused on seed investments. The parent company, CyberAgent (CA), is involved in businesses such as internet advertising, media, games, and investment nurturing, and the focus areas of investment are centered around internet and IT-related sectors, where CA’s expertise can be utilized.

Although CA is the main investor, the fund is not structured solely for strategic purposes like synergy with CA’s core businesses or M&A investments.

Therefore, investment decisions are approached with a pure investment mindset. For example, investments are considered even if the business is in competition with one of CA’s operations.

In addition to Japan, CA Capital has offices in the United States, China, Indonesia, Thailand, and Vietnam, where it engages with local entrepreneurs and investors, actively participating in the community while conducting investment activities. Currently, CA Capital has invested in over 100 startups in Japan and more than 200 startups globally.

The Japanese team consists of around 10 members, led by Representative Kondo. To support the growth of seed and early-stage startups, the team includes not only capitalists but also experts in technology, recruitment, and public relations who have experience at CA and provide assistance to portfolio companies as part of a growth team.

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- It’s rare for a CVC (Corporate Venture Capital) not to prioritize synergy with the parent company. What is the thought process behind this approach?

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It might be an exaggeration to say that we don’t collaborate at all. In fact, we are closest to CA within the organization. While our approach is primarily investment-focused, we also pursue collaboration opportunities, which might be seen as a slightly tricky stance (laughs). As long as it aligns with what entrepreneurs and founders need, and assuming we can engage in business fairly, we facilitate connections with the relevant departments or individuals within CA. However, investment is not done with collaboration as a prerequisite. This approach is shaped by CA’s own journey as a venture company, having gone through the startup process itself, and its ongoing efforts to launch new businesses within the company. This creates a culture that thinks from the perspective of entrepreneurs. The goal is to create more ventures and startups that continue to challenge, just like CA.

Within our organization, we often use the term "Entrepreneur-First". From the entrepreneur's perspective, the most important factor is not synergy with our parent company but the growth of the startup's own business. After investing, we provide advice and resources when necessary, but the key business decisions, implementation, and organizational direction remain the responsibility of the entrepreneurs and management teams. It’s important to respect the entrepreneurs and teams who are at the core of the startup, having seen many such cases. This is the core philosophy of CA Capital: it should be "Entrepreneur-First."

At CA Capital, many of our capitalists have hands-on experience in businesses, which is shared and passed down within the team. To support startups in seed stages aiming for Product-Market Fit (PMF) or those in the early stages scaling up, it’s not just about investment experience, but also a deep understanding of business operations and a stance that empathizes with the founders.

It’s not easy to get a business on the growth trajectory immediately after starting a company, and not everyone succeeds. As I mentioned earlier, CA may be slightly ahead of some startups in terms of growth, but as a venture company that aims to positively transform the world with new forces, we share the same values as the startups we support. We want to continue supporting startups with this mindset, and that’s something we value deeply at CA Capital.

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- Can you tell us about your actual investment activities?

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The investment committee is generally held on a weekly basis, so investment decisions can be made as quickly as 2-3 weeks after the first contact. Additionally, the capitalists do not have specific business sectors assigned to them; instead, each person delves into areas they are personally interested in and discusses and shares insights with each other. For example, we always have discussions on trending topics like how to access startups in emerging fields like generative AI, and to stay updated on global trends, we also hold a global online meeting once a month where all capitalists gather.

Since we primarily focus on seed rounds, the investment amount typically ranges from ¥20 million to ¥30 million, with valuations around ¥200 million to ¥300 million. However, this is just an average range and can vary.

Our stance when investing is to become the first investor for the startup and also to take the lead in the seed round.

Even as a lead investor, unless requested otherwise, we rarely take positions like board members, and typically attend management meetings or board meetings as observers. While decisions made at these governance levels are crucial, we prioritize dynamic and flexible communication, focusing first on helping the startup achieve Product-Market Fit (PMF) during the seed stage, without being overly concerned about formalities.

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-Since seed rounds often involve investing in startups that have not yet reached PMF (Product-Market Fit), what factors do you consider when making investment decisions for products that are still in development?

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It’s difficult to pinpoint a single factor as the most important, but we emphasize the importance of founder-market fit.

We look at whether the founder has a compelling reason to challenge themselves in that particular field and whether they possess a deeper user insight than anyone else in the industry. We also consider whether they can build the necessary team to scale the business, and if they have the ability to recruit talent. This is assessed based on their past experiences, interpersonal skills, and how they engage and motivate others. Additionally, we observe whether they can effectively articulate the company’s vision and direction, and if they can rely on others during tough times and learn quickly from failures.

While people can grow and change with experience, certain aspects rooted in their innate character tend to be difficult to change. Therefore, when speaking with first-time entrepreneurs, I try to envision what kind of team they could build in the future.

Looking further ahead to post-PMF, we also place significant weight on whether the founder can engage in conversations focused on numbers. In the scaling phase, it’s critical to quantitatively assess the business situation and respond swiftly, so we care about whether the founder can set appropriate KPIs, visualize them, and engage in multifaceted discussions about those metrics, even if the level of detail and sophistication varies.

Of course, we also confirm whether the market, even if small now, has significant depth, whether there is an irreversible scenario that supports market growth, and whether a new product could potentially overturn an already large market. A typical example would be that demographic trends are slow to change, so markets based on aging populations or declining labor forces appear attractive. We also look at factors like national policies, regulatory easing, or the advent of new technologies and devices, and how these factors will shape the market and create conditions that enable business scaling.

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Witnessing Two Major Shifts: The Burst of the IT Bubble and the Lehman Shock

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- Can you tell us about your childhood?

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I am originally from Motoujina, a small island in Hiroshima City, Hiroshima Prefecture.

Recently, it was the venue for the G7 summit. The elementary school I attended had about 100 students in total, with just 10 students per grade, and it was surrounded by nature in a very small, close-knit environment. I even served as the student council president in 6th grade, though in hindsight, I might have been a bit too cheeky for my own good (laughs). Despite considering quitting, I continued practicing Kendo for six years.

I also loved reading when I was younger. It all started when my grandmother gave me "Momo" by Michael Ende when I entered elementary school. At that time, there were no games or the internet, and the TV was occupied by my parents, so reading became my primary source of entertainment. This sparked my love for books, and I began reading a variety of genres. In my later elementary years, I frequently read detective stories such as those by Edogawa Rampo and the Sherlock Holmes series, which were available in the school library.

I attended a university-affiliated school nearby for both middle and high school. In middle school, I was passionate about baseball, and in high school, I formed a cover band and participated in the cheerleading squad. I was fortunate to be surrounded by unique and talented friends, and I had a lot of fun during my school years. Although we don't meet often now, I still find myself inspired by the achievements of my friends from that time.

For university, I enrolled in the Faculty of Letters at Waseda University. In high school, I only studied subjects I was interested in, so when I decided to take the university entrance exam, my teachers told me that it would be tough to make it in on the first try. However, I focused strategically on my strengths and, with some hard work, managed to successfully enroll.

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- What kind of career path have you pursued as a professional?

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During my university years, I joined the ski club. Although I wasn't particularly skilled at skiing, in my third year, I served as the chairperson of a 300-person competition. This experience allowed me to create an event with people from different backgrounds, and I found great joy in it. I continued to enjoy my youth (laughs), but as a result, I ended up repeating two years. The friends I made during this time are still connected with me, and I continue to be inspired by them.

When it came time to start my career, I thought the fastest way to catch up with friends who had already been working for two years was to join a small organization and produce results. Additionally, I wanted to work in a field that I found interesting, so I joined a newly established securities firm called Star Futures Securities as a member of its first securities division.

During my student days, the internet was becoming widely popular, and online-only securities firms were making headlines. I had always been interested in stock investments, and since I was also a fan of new technologies, I had opened an account with an online securities firm and invested in mutual funds. As a result, I felt that working in a securities company suited me in some way.

After joining the company, I spent my days calling wealthy clients, such as company executives and doctors, while being surrounded by senior colleagues with extensive experience at major securities firms. The unfortunate part was that we didn't handle mutual funds, so I had to propose individual stocks. I would dive into promising stocks by checking sources like the company’s quarterly reports and then recommend them to my clients. The process of analyzing and evaluating company information and expressing it in a way that others could understand is something I believe directly connects to my current work as a venture capitalist.

In fact, the year I entered the workforce, 2000, was the same year that companies like CA and Livedoor went public. Through my work, I saw new venture companies go public at high stock prices one after another.

At that time, I gradually began to think, "I want to join a venture and bet on the possibility of grabbing a big opportunity."

So, I went to a career consultation at a major human resources company, Goodwill Group, where a friend was working. They explained to me, "We are also a venture, and your sales experience would be valuable here. Why don't you join us?" Surprised by the unexpected offer, I ended up changing jobs to the company (laughs). After joining, due to the departure of the company's CEO and other key members, about six months later, I joined a new human resources firm founded by a colleague from my previous job as part of the business launch team.

To differentiate a new human resources company from others, attractive job offers were essential. We decided to create these job offers ourselves. I put into practice the idea of proposing the hiring of CxO-level talent for venture companies based on their growth stage, and recruiting job seekers. Not only did we conduct our own recruitment campaigns, but we also reached out to venture capitalists (VCs) and private equity (PE) professionals to get CxO roles from their portfolio companies. This approach of introducing excellent candidates to the management teams of venture companies gradually gained traction, and the business grew smoothly.

At the same time, as my interactions with VCs and PE professionals increased, and I engaged with entrepreneurs, I began to feel the desire to contribute to venture companies not just in terms of human resources, but also capital. I decided to rethink my career.

With this in mind, I joined Mirai Securities (now known as Mirai Securities), an independent securities firm, where I could get involved in venture investments despite being inexperienced. The company had been founded by Mr. Imahara, who had served as president at both JAFCO and Japan Asia Investment, and many of its staff came from VC backgrounds like JAFCO.

After joining, I did the same kind of work I had done in securities and human resources—cold calling and cold visiting potential investment candidates in the venture space, building relationships, and learning from my seniors. The main targets for investment were late-stage companies preparing for an IPO, so I spent time researching these companies through databases and media, and made sure to meet with them. To make investments in promising ventures, I helped with their sales, introduced talented people from my network, and did whatever I could. My focus was always on creating "benefits for us as shareholders."

Thanks to these efforts, I was able to invest in 12 companies over my 3 years there. The market was recovering from the collapse of the IT bubble, and one of my portfolio companies, Full Speed, went public about a year after our investment, delivering great performance. I also met Mr. Tajima, who would later become my boss, through this connection, as CA Capital had also invested in Full Speed.

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My experience at Mirai Securities captivated me with the venture investment business, and I became convinced that this was my true calling. Entrepreneurs are positive people who are always challenging themselves with new things. Engaging in discussions with them stimulated my intellectual curiosity, and I found it exciting that there is no "right answer" or "guaranteed success"—it’s always about confronting new questions. And when the investments succeeded, the returns were substantial. This combination of novelty and volatility suited my personality well.

On the other hand, as I increasingly thought about how to gain the trust of entrepreneurs and continue to work closely with venture company executives, I felt that it was necessary not only to be involved as an investor from the outside, but to gain experience as part of a venture's management team. At the time Full Speed went public, I felt a sense of closure in my mind, and an old acquaintance, who was a founder, invited me to join a venture company called Knocking-On. In 2007, I joined as the head of corporate planning and later became CFO.

The company at the time provided affiliate advertising, promotional campaigns, and digital marketing for financial institutions. When I joined, it had about 30 employees and was experiencing steady growth, and we were preparing for an IPO. However, in the midst of this, the impact of the 2009 Lehman Shock caused a sharp decline in the revenue of our main business. We halted the IPO preparations, stopped our main business, and decided to focus on new businesses that had the potential to become profitable, downsizing the organization until we could see the benefits. In a major shift in strategy, the company ultimately became part of a listed company, and as a result, the founding members left management, and I took over as CEO.

Around this time, there was a transition from flip phones to smartphones, and we struggled to nurture the next pillar of the business. We sought opportunities to revive the company by acquiring a media business, but while profitable, we couldn't achieve the growth rate we had hoped for. As a result, after two years, the decision was made to integrate the company into the parent company, and in 2012, I left the company.

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- You have experienced major market shifts twice. What led you to join CA Capital afterward?

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Initially, I thought about joining a venture company once again as CFO and taking on the challenge of bringing the company to an IPO. I consulted with various acquaintances and had offers from companies, but ultimately, it was the words of Mr. Tajima, the then-CEO of CA Capital, that moved me: "Instead of joining one promising venture as CFO, why not become a capitalist who creates 100 promising ventures?" This resonated deeply with me, and I made my decision.

Recently, having become one of the senior members, I’ve naturally become involved in mentoring younger staff, and my responsibilities have expanded. However, my main focus has remained consistent in my role as a venture capitalist making seed-stage investments, which is the core of CA Capital.

Although both involve investing in startups, the approach to seed-stage investment is completely different from the middle and later-stage investments I made at Mirai Securities. At first, I struggled to update my own perspective, but thanks to support from both internal and external colleagues, I was able to get grounded and started contributing effectively after about 2 to 3 years.

In the seed stage, the business model is still in development, so it’s important to focus on how to hypothesize with a user-centered approach, work with mock products, and refine early-stage questions through discussions with entrepreneurs. As a capitalist, how can I have a positive impact on entrepreneurs? I struggled with this, but Mr. Tajima provided me with some tough but caring guidance (laughs).

What makes CA Capital special is the culture of free and open discussions among team members. We can easily share ideas, challenges, and knowledge with each other. This flat communication style has never made me feel uncomfortable, and I still believe this is one of the greatest aspects of the company.

As a result of gradually earning trust, in 2014, I had the opportunity to launch a fast-moving investment framework close to the angel round. I’ve been involved in various projects, but through all of this, I’ve been able to immerse myself deeply in the world of venture investment, which I truly consider my calling.

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Without Entrepreneurs, There Can Be No Investment

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- Mr. Takekawa, how do you view your work as a venture capitalist investing in startups, and what mindset do you bring to it?

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As previously mentioned, the key point for investment decisions is the people, particularly the entrepreneur and the management team, in seed-stage investments, where the product is often still under development.

Even as the number of seed-stage startup investments increases, once we’ve made an investment, I always maintain the mindset of being an ally to the entrepreneur and their team, supporting them all the way through. The fact that I’ve been at CA Capital for almost 12 years is perhaps a reflection of my deep attachment to the joy of sharing both the struggles and successes with the companies I’ve invested in, starting from the seed stage.

What I am always conscious of in my work is the respect for entrepreneurs, who are the true originators of business creation. No matter how much money a VC has, if there are no entrepreneurs who need that money, this job cannot exist. This holds true not only for venture capitalists but for anyone who provides funding. The position of a funder is one where, if you're not careful, your self-esteem can easily become inflated. That’s why, not only do I remind myself, but I also constantly repeat the importance of "entrepreneurs first" to the younger members.

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- Mr. Takekawa, could you share your thoughts on the ideal image of a capitalist and your own goals?

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When I first joined CA Capital, since we were in the seed stage, I focused primarily on understanding the entrepreneurs' personalities and evaluating the strength of the founding team. I continued to verify the relationship between the business growth post-investment and my initial assessment of the entrepreneurs and their teams. In my opinion, as a capitalist, it is essential to gain insight into the entrepreneur's character and the source of their desires, and connect this understanding to business growth — essentially, achieving founder-market fit. Additionally, once an investment is made and we decide to "support" the entrepreneur, it is important to be committed to providing support for as long as needed, all the way to the end.

In VC funds, sometimes entrepreneurs from our portfolio invest in the next fund with the capital they gained from an IPO or other exits. Depending on the size of the fund, I believe this is one ideal scenario for the relationship between entrepreneurs and capitalists.

Personally, I enjoy building relationships with people and progressing while respecting those relationships. So, I want to be committed to building trust and achieving good results. And since seed-stage startup investments don’t yield immediate results, I’m particularly conscious of the importance of "persisting" in this work.

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- In recent years, many corporations have started to establish CVCs (Corporate Venture Capital). From your long experience in CVC investments, what do you see as the challenges and opportunities for CVCs and CVC capitalists?

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First, the increase in CVCs is positive for startups because it means there are more options for fundraising and business collaboration, which can drive growth. In the past, I’ve even been consulted about setting up CVCs. While we are not a pure CVC ourselves, based on past trends, I’ve advised people starting CVCs to first “appoint someone prominent to the front, and proceed without major changes in the fundamentals.” I believe that in large corporations, where it’s difficult to see the faces of individuals, those who support startups should ideally remain stable and constant, without frequent personnel changes.

Also, if the goal is to commit to the growth of startups and co-create innovative businesses, I believe it’s important to go beyond just making minority investments and ensuring financial returns. There should be challenges in taking a lead in investments or even pursuing more involved actions such as M&A.

It would be great if successful cases were to emerge, where investments from CVCs lead to joint ventures (JVs), M&A, or the creation of new businesses. In the case of large corporations, when it comes to new businesses, the expectation is that they grow to the point where they generate tens or hundreds of billions of yen in operating profits. If we are to meet those expectations directly, I believe that, instead of making minority investments and considering M&A or JVs once the company has grown, CVCs should commit to developing those companies to that scale themselves. Only then will successful examples emerge.

In the past few years, the Kishida administration has also shown interest in nurturing startups, and the attention on startups in Japanese society has never been higher. In this environment, I believe there are more opportunities for VCs and CVC capitalists to contribute.

If someone is interested in becoming a capitalist, reading books or following media is good for gathering information. However, I recommend meeting people in person and listening to their experiences. Asking entrepreneurs, "Who is your favorite capitalist?" and digging into why, for example, can provide valuable insights. If you meet people with intellectual curiosity who are willing to go and meet people they’re interested in, and who won’t hesitate to gather first-hand information, I believe these are the kinds of people who are suited to becoming capitalists. Of course, there are also those who can deduce things and make plausible arguments even without direct access to primary information, which is also a form of excellence. However, especially for seed-stage entrepreneurs, when the focus is on repeatedly improving a product while facing potential users, I think it’s a bit of a waste if capitalists don’t closely support the entrepreneurs through that process.

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- Finally, could you share what you hope to achieve through your work as a capitalist?

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The world of startups is always changing. New entrepreneurs will continue to emerge, and with them, new business opportunities. In this environment, I hope more capitalists will join in, who are willing to face the various societal challenges entrepreneurs are dealing with and pose meaningful questions alongside them. I want to be one of those capitalists.

In the face of loneliness, believing in one’s own thoughts and judgment, forging a path as an entrepreneur, and continuing to challenge oneself to create new value for society—that "entrepreneurial spirit" should spread further across society. I believe that if we, as venture capitalists, support the realization of entrepreneurs’ visions and, indirectly, help spread the "entrepreneurial spirit," this profession will be recognized as more attractive, and the world will naturally become better.

With this belief in mind, I will continue this work going forward.