This study aims to investigate the capital acquisition processes for startups, focusing on Japanese technology-based startups, through grants across various growth stages. Through exploratory factor analysis, it was revealed that grants obtained during the conception stage contribute to capital accumulation concerning entrepreneurial maturity and the development of business ideas. Conversely, during the conception-commercialization stage, grants are vital in capital accumulation related to team maturity, product commercialization, and industry legitimacy.
Considering Japan’s institutional environment, characterized by lower startup investment compared to the United States and a concentration of investment in seed-early stages, grants emerge as pivotal in resource acquisition for startups from the ideation to commercialization stages. Furthermore, grants appear to enhance entrepreneurial education in Japan’s less entrepreneurial environment, indicating a broader role beyond mere financial support.
While existing studies focused on grants’ signaling function and their impact on fundraising, our findings suggest that grants facilitate the acquisition of resource and institutional capital, potentially leading to advantageous fundraising in subsequent stages.