Funds Startups Holds 2nd Annual LP Meeting for its Financial Institution Joint Research Venture Debt Fund

Funds Startups Inc. (Headquarters: Shibuya-ku, Tokyo; Representative Director: Hirohiro Maekawa; hereinafter 'the Company') invited participating LPs (Limited Partners) of its financial institution joint research venture debt fund, 'Funds Venture Debt Fund 1 Investment Business Limited Partnership' (hereinafter 'the Fund'), and held the second annual general meeting of partners on May 25, 2026.

This meeting was held to mark the milestone of two years since the establishment of the fund. In the first part, we reported to the LPs on the fund's financial results and operational status. In the second part, aiming to promote the 'joint research' concept of the fund, two talk sessions were held with the fund's advisors and portfolio startups, sharing practical knowledge and on-the-ground voices regarding venture debt. In the third part, a buffet-style networking reception was held, bringing together LPs, portfolio companies, and advisors for a lively exchange connecting startups and financial institutions.

This LP meeting consisted of the following three parts:

Part 1: Fund Report In addition to financial reports (including mark-to-market valuations), we reported on the current market environment, our activity highlights, investment review status, and the direction for future fundraising.

Part 2: Talk Sessions Two talk sessions were held, leading to active discussions.

1. Advisor Session Mr. Kurihara of LS Ventures and Mr. Kurokawa of Evanescent took the stage, with our fund partner Kojima serving as the facilitator, discussing the theme 'Venture Debt from the Perspective of Advisors.' Based on their backgrounds as partners in drug discovery and deep-tech VCs, the two shared valuable experiences, particularly regarding the potential for venture debt in deep-tech startups, touching upon the differences between Japan and overseas, as well as differences by growth phase. They also raised unique perspectives on subsidy bridge financing as a debt utilization method. Furthermore, they commented on the depth of the due diligence process from a venture capitalist's point of view, sparking a lively exchange of opinions with the LPs.

2. Portfolio Company Session Mr. Kumagai, Executive Officer of Sorajima, and Mr. Ueki, Board Member and CFO of Acompany, took the stage, facilitated by our company's Suzuki, for a session themed 'Utilizing Venture Debt / Between BtoB and BtoC Businesses.' The two companies, which have very different business models, spoke frankly about why they chose to utilize debt in addition to equity, the background behind this, and the negotiation process leading up to the procurement. They openly shared the practical hurdles of making financial institutions understand the difficulties startups face when running cash-flow deficits due to upfront investments. The session provided many insights for the LPs.

Part 3: Networking Reception A buffet-style reception was held, fostering lively interactions among participating LPs, portfolio companies, advisors, and our company personnel.

◾️ Comment from Hirohiro Maekawa, Representative Director Since its establishment in March 2024, this fund has continued to operate as one of Japan's leading independent venture debt funds. We have reviewed over 400 execution candidates cumulatively, resulting in the execution of approximately 4.1 billion JPY in venture debt to 16 companies. The fund has reached what is called a 'full investment' state, and we are currently transitioning to a recycling operations phase.

In a market environment where the IPO gateway is narrowing and exit pressure is intensifying, diverse options such as strategic M&A and secondary trades are emerging. The venture debt industry is increasingly fulfilling a function as financial infrastructure. I feel that by effectively utilizing debt, companies can select more ideal growth options in their pursuit of optimal capital policies.

About Funds Startups Funds Startups Inc. operates under the mission of 'developing mechanisms where startups that create social impact can achieve their most ideal growth.'