[20th Anniversary Project-18] Launcing “Germination Fund,” a fund with an unlimited duration for investments in entrepreneurs in the establishment-phase of their venture
Leave a Nest Co., Ltd. (Head Office: Shinjuku-ku, Tokyo; Founder & Group CEO Dr. Yukihiro Maru; hereinafter referred to as “Leave a Nest”) has launched the “Germination Fund I Investment Limited Partnership” (hereinafter referred to as “Germination Fund I”), that will start operation on January 2023 with an “unlimited duration” of existence and will specialize in seed investment in domestic venture companies founded by entrepreneurs who are trying to solve deep issues. Leave a Nest’s subsidiary Leave a Nest Capital Co., Ltd. (Head Office: Shinjuku-ku, Tokyo; Representative Directors: Mr. Masahiro Ikegami, Dr. Shuichiro Takahashi; hereinafter “Leave a Nest Capital”) will manage the fund as a general partner, while Leave a Nest and members of Leave a Nest and Leave a Nest Capital will participate as limited partners.
In this fund, all members will contribute to the growth of the venture not as supporters but as proactive participants, and will initiate new projects involving large companies as well as small and medium-sized enterprises, thereby realizing a new type of fund whose ultimate purpose is not just the sale of shares held.
Background of the fund genesis
Leave a Nest was founded 21 years ago, on December 15, 2001, holding a “lecture on advanced science” to children in Kumon classes (private prep school in Japan) , which became the origin of our Science Workshops. Then, on June 14, 2002, 15 undergraduate and graduate students in science and engineering became co-founders of the company and raised 3.6 million yen in capital at their own expense, leading to the establishment of Leave a Nest heralding the mission of “Advancing Science and Technology for Global Happiness”. Since then, all members of Leave a Nest have been working as “Science Bridge Communicators®️” with the goal of bridging knowledge and technology from different fields and continuously starting their own projects to contribute to the world.
In 2014, as a part of the “Frontier Development Project” to create new businesses in the world, Leave a Nest launched TECH PLANTER, a program to discover and nurture deep tech ventures that take on the challenge of solving global issues through the power of R&D and manufacturing, and has discovered as many as 3,000 entrepreneurs in Japan and abroad. Furthermore, in order to change the world by promoting social implementation of science and technology, the members of Leave a Nest are taking the leadership to encourage the creation of new companies, and the group as a whole is providing investment, hands-on support, and corporate support services through Leave a Nest Capital, investment, hands-on and incubation facility operations through Glocalink Inc., and VC investment, etc. through the Real Tech Fund. Therefore, the group as a whole has built through the years a support system for the creation of new ventures.
However, not all of the issues associated with ventures have been resolved. In the seed period following the establishment, it is difficult to raise funds from VCs or obtain bank loans, so angel investors often end up taking high risks and investing their own money, most of which coming from single individuals. In addition, existing funds generally have a duration of ten years, and some ventures that require many years of R&D may face extreme difficulty in raising funds due to this time frame. In other words, there is hardly any organization or VC firm in Japan that can continue backing ventures from the seed stage to social implementation over a long period of time.
In this context, Leave a Nest will launch the “Germination Fund I” in January 2023, a new type of fund with an “unlimited duration” whose ultimate purpose is not just the sale of shares, to create an impact through the social implementation of science and technology. To further promote the success of the backed ventures, the fund’s limited partners, i.e. Leave a Nest’s Science Bridge Communicators will use their strength to promote the growth of these enterprises, while launching new projects involving ventures and large companies, small to medium-sized companies and others.
As Leave a Nest celebrates its 20th anniversary, it will once again create a cycle of investment in which its members contribute with funds to directly nurture the next generation of ventures, just as the founding members did when, still students, invested their own funds to establish Leave a Nest.
Features of the fund
“Germination Fund I” was created after thorough investigation on what challenges Leave a Nest should take on after reaching its 20th anniversary, and what challenges cannot be faced by no other than Leave a Nest.
The features of this fund are as follows.
(1) The limited partners are Science Bridge Communicators® (“SBCs”).
SBCs at Leave a Nest are members who bridge knowledge between researchers and different fields while launching projects on their own. In this fund, most of the limited partners are SBCs. We believe that the growth of the backed ventures will be further promoted by the participation of SBCs, who are committed to both the growth of Leave a Nest Group and the investee companies by contributing their own funds, working hard, and launching projects involving the backed ventures with large and small companies that hold the key to their growth.
In addition, this fund specializes in promoting the germination of seeds by making small investments in seed-stage Japanese ventures, which have been established by entrepreneurs who are striving to solve deep issues. Although the size of the fund is not large, we believe that the fact that limited partners are all SBCs enables a loose risk-taking small-scale management approach.
(2) The duration of the fund is indefinite.
We have set the duration of this fund to “unlimited”. By setting an unlimited duration, we hope that the managers and researchers of the ventures in which we invest will be able to devote their maximum resources, both physically and mentally, to R&D and social implementation without being swayed by IPOs, M&As, and other exit deadlines, while having Leave a Nest as a partner through the duration of their endeavors.
However, this does not mean that we do not expect any achievement throughout a long period of time. Leave a Nest will promote the research and development of portfolio companies by utilizing its knowledge-based platform, while Leave a Nest Capital will help the portfolio companies build their management foundations, thereby paving the way for backed ventures’ expeditious social implementation of science and technology.
Through the management of this fund, we will further accelerate the growth of Leave a Nest Group together with the social implementation of science and technology by the backed companies, thereby realizing the mission of advancing science and technology for global happiness.
Outline of the Fund
Name: Germination Fund I Investment Limited Partnership (Commonly known as Germination Fund I)
Fund amount: 130 million yen
Investment per company: 5 million yen
General partner: Leave a Nest Capital Co., Ltd.
Limited partners: Leave a Nest Co., Ltd., directors and employees of Leave a Nest Co., Ltd. and Leave a Nest Capital Co., Ltd. who meet certain conditions (34 persons in total)
Establishment: December 1, 2022
Leave a Nest Capital Cp., Ltd.
Attn. to Casale
Leave a Nest Co., Ltd.
Corporate Planning Office
Attn. to Takeda, Matsubara
E-mail: [email protected]