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Japan allows public universities to hold equity in their start-ups

By Jesse Schwartz
Published: October 3rd, 2018

The Japanese government is planning to allow its public universities to hold onto equity stakes in their start-ups in an effort to generate more funding for research.

The government hopes the move will help Japan compete with the levels of research funding raised in Western nations by funneling the revenues of university-born start-ups back into university labs.

Under current guidelines, Japan’s universities can acquire shares from their start-ups in exchange for technical assistance and other resources, but the schools are strongly encouraged to sell the shares as soon as possible. The new guidelines being proposed would allow universities to hold onto the stock over a longer period and reap the benefits once a start-up’s value rises.

The plan would also expand the number of universities that are allowed to directly invest in start-ups, as well as the types of companies that are eligible for funding. It would help Japanese universities diversify their income and provide an alternative to government funding, which has become less and less reliable for university researchers.

The lawmakers behind the move plan to submit revisions to the legislation that oversees research funding as early as this fall.

Source: Nikkei Asian Review

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