How entrepreneurship in Japan is not like entrepreneurship in the U.S.: Joi Ito explains the common practice by Japanese lenders (and even early-stage investors) of requiring a personal guarantee by everyone associated with the startup — and others. In the U.S., the “veil” between corporate and personal obligations is quite rigid by comparison. Personal guarantees in the U.S. are rather common with small business bank loans, however, the system which Joi explains seems to be an attempt to wring out all risk from those who finance the startup. Most tragic: As Joi explains, the system not only chokes off entrepreneurship, it leads to a high suicide rate among those who start businesses and fail.
If such a practice were instituted in the U.S., that sound you hear would be the screeching halt of business startups.
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