Once known for technology innovations such as the Walkman, gaming systems and bullet trains, Japan has long been a laggard when it comes to venture capital and startup success. The world’s third-largest economy has produced just a handful of tech unicorns, and funding for new businesses has been a relative pittance compared to the massive flows in the US, Europe or other parts of Asia. More recently, however, there have been encouraging signs of change in Japan’s startup ecosystem. Several major western VCs and other institutional investors, as well as a growing number of domestic players, have been funneling money into new ventures. To help understand the evolving environment in Japan, we talk to Paul McInerney, a general partner at Incubate Fund, a leading seed-stage investor in Japan with over $840 million in assets under management.