Venture Capital And Tech Startups In Taiwan
Why it is what it is today
We are Stella and Amy. We share firsthand stories and perspectives that are either lost in translation or simply inaccessible to you. Together, we bridge cultural divides and bring the world a little closer—one post at a time.
This week, Stella and Amy sat down with IC Jan, a veteran venture capitalist and one of the founders of AppWorks (Taiwan's Y Combinator equivalent). IC is now leading Taiwan Global Angels to help Taiwanese entrepreneurs go global after 20+ years of investment experience.
The Cocoons
Stella: Back in the manufacturing booming days (in Taiwan), was there a lot of foreign investment? Did a lot of U.S. dollar funds invest in Taiwan?
IC: Not really — except for companies like TSMC, which had its own unique circumstances. Most of Taiwan’s manufacturing industry was actually funded by local enterprises and government-backed funds rather than foreign investors.
Amy: What about today’s internet companies in Taiwan?
IC: Well, as a VC, if I have money to invest, why would I put it in a market with fewer exit opportunities? Taiwan’s three main investment sectors—manufacturing, biotech, and internet companies—are primarily focused on going public in Taiwan.
Taiwan’s manufacturing sector is globally competitive, so these companies are big enough to attract attention from global investment banks and securities firms.
Now, when it comes to internet or biotech startups, it’s a different story. The biggest issue is scale. For perspective, most publicly traded companies in Taiwan are valued around $100 million, maybe a bit more. This makes Taiwan’s internet and biotech companies much less attractive to big U.S. venture capital firms.
Stella: So is it fair to say that due to market size and other factors, Taiwan’s internet companies are operating in a low-risk, low-return model?
IC: I would say, Taiwan VCs ended up operating that way. Taiwan’s internet companies want to go high-risk, high-reward, but the real question is—can they scale globally? If they can’t, it’s hard to generate the kind of massive returns that VCs are looking for.
Taiwan’s Tech industry is shaped by its success in manufacturing
Taiwan's strength in manufacturing has shaped its hardware and software industries, creating both opportunities and challenges. During the 80s and 90s, Taiwan became a global leader in high-tech manufacturing, with companies like TSMC and Foxconn setting the stage for a venture capital ecosystem that prioritized tangible assets, efficient supply chains, and steady profitability.
This created a deeply ingrained investment mindset—one that favored predictable returns over high-risk, high-reward bets. While Silicon Valley investors were funding software startups willing to burn cash in pursuit of scale, Taiwan’s venture capital scene remained cautious, hesitant to back internet companies without a clear path to profitability.
As a result, while Taiwan’s manufacturing sector thrived on global demand and foreign investment, its internet startups struggled to gain the same level of support. Manufacturing firms could easily tap into international markets, but internet companies often found themselves constrained by a smaller domestic market and a capital environment that lacked the scale needed for billion-dollar exits.
Unlike in the U.S. or China, where software startups can attract major venture capital and expand aggressively, Taiwan’s software founders frequently face the challenge of securing funding from investors still wired for manufacturing-era economics. As a result, many seek exits through acquisitions rather than public listings.
An Illusion: Internet companies are more global
IC shared an interesting observation—Taiwan’s manufacturing companies are often more global than its internet startups. While it might seem like software businesses, with their borderless nature, should have an easier time expanding internationally, IC pointed out that the reality is more complicated.
Manufacturing thrives on a clear, well-established global supply chain. Taiwanese companies like TSMC, Foxconn, MediaTek, and Quanta supply components and products to tech giants across the world. Their business models are built around global demand, with customers ranging from Silicon Valley to Shenzhen. Even without strong local branding, their reach is undeniable because the hardware they produce is essential to international markets.
In contrast, IC noted that internet startups face significant hurdles when scaling beyond Taiwan. Unlike manufacturing, where products integrate seamlessly into global supply chains, software and digital services often require deep localization. Language, regulations, consumer behavior, and even payment systems vary dramatically across countries, making global expansion far more complex than simply shipping a physical product.
“The next big breakthrough is still gonna be from Silicon Valley”
IC believes that despite the rise of tech hubs worldwide, the next big breakthrough will still come from Silicon Valley.
While cities like Beijing, Berlin, and Tel Aviv have strong tech ecosystems, IC argues that no other place matches Silicon Valley’s unique mix of venture capital, top talent, leading universities, and a startup culture that embraces risk and failure.
Another key factor is Silicon Valley’s advantage in scaling global tech companies. The U.S. hosts the world’s biggest technology buyers, giving startups a massive market to grow before expanding internationally. The Valley’s network effect also keeps attracting the most ambitious founders, investors, and engineers, ensuring that the next wave of disruptive technologies—whether in AI, cloud computing, or beyond—will likely have its roots there.
Pushing Taiwan startups to go global
(a.k.a. come to the U.S.)
Venture capitalists are playing a crucial role in helping Taiwan’s startups expand globally, and some are leading by example. IC himself embodies this mission—he moved from Taiwan to California five years ago and has been working ever since to support Taiwanese startups in going global. By positioning himself in the heart of Silicon Valley, he’s able to connect founders with international investors, market insights, and a broader startup ecosystem that can accelerate their global expansion.
One key way investors like IC support startups is by pushing them to think beyond Taiwan from day one. Unlike in the U.S. or China, where companies can grow large domestically before expanding overseas, Taiwanese startups often have no choice but to go global early. This means they need not only capital but also access to international networks, mentorship, and market knowledge—areas where experienced VCs can provide invaluable support.
Another important factor is fostering more cross-border investment and collaboration. Many of Taiwan’s traditional investors still operate with a manufacturing-era mindset, focusing on safe, predictable returns. To change this, IC and other VCs are actively working to bring in foreign capital and introduce Taiwan’s founders to international investors who are more familiar with the high-growth, high-risk nature of internet startups.
Ultimately, for Taiwan to produce truly global startups, it will take more than just ambitious founders—it requires a shift in the entire investment landscape. By changing how startups are funded, mentored, and positioned in the global market, VCs like IC are reshaping Taiwan's tech future.
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We are Stella and Amy. We share firsthand stories and perspectives that are either lost in translation or simply inaccessible to you.
