Startup M&A Guidance Released

1. Background to the development of the guidance

To develop the startup ecosystem, it is crucial for each startup to choose an appropriate growth measure, such as an initial public offering (IPO) or M&A, based on its business phase and characteristics. Meanwhile, for investors and operating companies, abundant investment recovery opportunities, including IPOs and M&As, drive their proactive investment activity on an ongoing basis.

Up until now, startups have primarily chosen IPOs as their growth measure under capital policy. Therefore, there is considerable room for startups to leverage M&As as stepping stones for their growth. In addition, given that the Tokyo Stock Exchange, Inc. is implementing initiatives to improve the Growth Market, including a reconsideration of its Continued Listing Criteria, M&As are becoming increasingly important for startups.

Furthermore, an increase in the use of M&As as a growth strategy for startups is believed to not only drive the development of the startup ecosystem but also encourage open innovation between large companies as buyers and startups as sellers, leading to business scale-up on both sides and the creation of new industries.

Accordingly, with the aim of accelerating and invigorating M&As as a growth method for startups, METI compiled the guidance by systematically summarizing key points for startups as sellers, particularly business owners, and for primarily large companies as buyers, based on interviews with industry experts.

2. Structure of the guidance

Chapter 1 Current status and challenges surrounding startup M&As

• Status of M&A utilization in Japan

Chapter 2 Guidance for sellers (1)

• Why M&As should be considered from an early stage of business management; approaches to growth measures

Chapter 3 Guidance for sellers (2)

• Specific points to note when considering M&As from an early stage of business management (capital policy, governance, business strategies, human resources)

Chapter 4 Guidance for buyers

• Key points for buyers (top management’s commitment, development of organizational structure, institutional understanding, etc.)

Chapter 5 Key points in executing M&As

• M&A process, consideration of the structure, key points in concluding a contract, etc.

Chapter 6 Case studies

• Key points explained using actual M&A cases

Related Material

• Startup M&A Guidance: Toward the Growth and Development of the Startup Ecosystem and the Creation of New Industries (in Japanese)(PDF:7,397KB)

Division in Charge

Innovation and Startup Promotion Division, Innovation and Environment Policy Bureau