Complex Systems with Patrick McKenzie (patio11) Startup investing in Tokyo, with Coral Capital’s James Riney
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Jul 31, 2025 James Riney, a partner at Coral Capital, shares his insights on Japan’s booming startup ecosystem, which has surged from a $700 million market to as much as $10 billion. He discusses the cultural hurdles new startups face, such as the importance of the 'gaijin card' and the unique hiring practices in Japan. Riney highlights why Japanese engineers prefer Twitter over LinkedIn, and how American development tools are gaining traction in Tokyo. He also delves into regulatory complexities and the shift toward independent funding sources in venture capital.
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James Riney's Startup Genesis
- James Riney shared his early venture into startups starting at a JP Morgan hackathon event in 2010-2011.
- This experience led to his first startup attempts and the founding team that became Coincheck, Japan's leading crypto exchange.
Equity Culture Shift in Japan
- Early Japanese startup employees preferred salary over equity due to lack of role models who got wealthy from stock options.
- The success of Mercari with a 20% stock option plan shifted this culture, normalizing equity incentives in Japan.
Japan's Hidden Unicorns
- Japanese companies often IPO earlier and at lower valuations than US counterparts, but when including public market valuations over time, Japan has many "hidden unicorns."
- The timeline to reach billion-dollar enterprise value is just longer and includes public markets.