Podcast Summary

Teppei Tsutsui: General Partner of the GFR Fund

Podcast: The Investor with Joel Palathinkal
Host: Dr. Joel Palathinkal
Guest: Teppei Tsutsui (General Partner, GFR Fund)
Date: January 2, 2026

Episode Overview

In this episode, Dr. Joel Palathinkal sits down with Teppei Tsutsui, General Partner of the GFR Fund, a venture capital firm specializing in gaming and consumer technology. Teppei shares his personal journey from his early years in Japan to his global business experiences, and provides a deep dive into the investment landscape of the gaming industry. The discussion is rich with insights on career pivots, venture decision-making, the intersection of gaming and consumer tech, macro trends, and advice for emerging investors.

Teppei’s Background and Journey (01:42–09:35)

• Early Education & Life Abroad
  • Teppei was born and raised in Tokyo, but at 15 spent almost a year as an exchange student in Sibley, Iowa, USA, experiencing small town Midwest life and American culture.
    • “I was like only Asian kid among … a lot of people from like, like a rural like Iowa town.” (01:52)
  • Originally aspired to work for the UN, studying International Relations.
    • “In high school, I want to like work for the United Nations … not like VC fund, like investing at all.” (06:19)
• Career Pivots
  • After college, joined Mitsubishi Corporation, helping Japanese businesses expand overseas and gaining exposure to the US startup scene.
  • Inspired by the book “Eboys” about Benchmark Capital while in college—planted the seed for a future in venture capital.
    • “That was really the first moment that I want to like mimic a dream about the VC fund or actually becoming a [VC]…” (02:55)

From Corporate to Venture Capital (09:35–15:06)

• Global Business Experience
  • Helped US startups enter the Japanese and Asian markets through joint ventures with Mitsubishi, facilitating market entry and partnerships.
    • “We ended up like setting up the joint venture between that like a US company and Mitsubishi…” (11:45)
  • Emphasis on the importance of corporate partners for startups: ecosystem access, expansion, and growth.
• Corporate VC Insights
  • Many GFR LPs are corporate VCs from gaming and media sectors.
  • Reasons for corporate investment:
    • Sourcing future M&A deals
    • Strategic partnerships
    • Finding new technology worldwide
    • “Some corporate is like looking for like a future M and A… The more like invest us as like more deal sourcing perspective.” (13:13)
  • Differences between corporate and independent VCs in deal process and agility.

GFR Fund’s Investment Process & Team Dynamics (15:06–21:27)

• Deal Flow & Decision-Making
  • Structured process: Associates source deals, then partners meet with founders, followed by deeper diligence and consensus-based decisions.
    • “We do have those like Monday meetings, like a deal, four meetings. And everyone has kind of bring in a new company…” (16:13)
• Unique Voting System
  • Incorporates an “overruling credit” approach: Partners can “override” the group’s consensus once or twice per fund cycle to back contrarian bets.
    • “We have those overruling voting system … so outlier usually kind of, you know, separate those like opinions.” (18:05)
    • “You have to make a really confident [choice] that we want to really use [the credit].” (20:15)
• No Scoring Rubrics
  • GFR emphasizes discussion and team judgment over quantitative scoring or rubrics, believing scorecards don’t accurately capture the nuances of venture investing.

Investment Criteria & Hard Passes (21:27–24:28)

• What Makes a Standout Gaming Startup
  • Prioritize founders building organic communities (Discord, Instagram, Twitter), focusing on distribution and user engagement.
    • “Distribution is a key … founders [should] build their own community…” (21:46)
  • Red flags: Founders heavily reliant on paid user acquisition rather than organic growth.
    • “We don’t really like that … if stuff they have a [heavily paid] growth strategy or go to market strategy that’s going to be like really like [a] red flag for us.” (23:37)
• Scalability & Gaming Ecosystem
  • Gaming's digital nature enables rapid, global scale; capital should fuel existing organic growth.
  • Gaming infrastructure and lessons (like gamification) increasingly apply to broader consumer tech sectors.

GFR Fund Origin & Gaming Ecosystem Deep Dive (25:19–30:12)

• Founding Story
  • Teppei’s path: From Mitsubishi to Morgan Stanley (covering TMT and gaming), then to GREE (as CVC lead), and finally co-founding GFR Fund to address a gap in gaming-focused VC.
    • “We launched it back in 2016, and always we want to like, invest in the emerging technology or more like an intersection between emerging technology and the consumer and gaming.” (27:22)
  • GFR has raised three funds, actively invests across VR/AR, blockchain gaming, AI, and more.
• Market Segments & Trends
  • Gaming market divides into PC, mobile, and console—each roughly a third of the global market.
  • Mobile gaming is fastest-growing, but highly competitive (“red ocean”), favoring large spenders.
    • “Mobile game is like a really red ocean, really competitive and the big company… splashing like money to like for the marketing too.” (32:24)
  • GFR prefers PC gaming for its “startup friendly” dynamics and community focus.

AI, Game Development, and the Future of Gaming (30:12–39:16)

• AI’s Transformative Role
  • AI accelerates game asset creation, reduces development time, and enhances in-game experiences (e.g., more realistic NPC interactions).
    • “AI asset creation is a really obvious use case … much more like a faster, more efficient, more creativity as well.” (32:55)
  • AI user tools unlock new experiences (asset creation platforms as entertainment).
• Consumer & Gamification Crossover
  • Gaming mechanics, like progression and rewards, extend into edtech (e.g., Duolingo) and other consumer apps.
    • “Gaming maybe it’s like a single industry but actually affecting all the other consumer technology.” (24:28)
  • Social and therapeutic applications: Gamification aids both learning (e.g., business simulations for kids) and therapy (PTSD, physical rehab).
    • “There was people that dealt with post traumatic stress and they watch a game that’s like a peaceful experience and that kind of helps them from their mental state.” (37:02)
• Arcades and Emerging Interfaces
  • Future arcades: Personalized avatars, persistent profiles, mobile phone integration as a controller, blending digital and physical experiences.
    • “If you go to those arcade, you can create your own avatar… and play the game with those… in the game too.” (35:36)

Macro Trends and Advice for Investors (39:16–46:40)

• Emerging Markets & Demographics
  • Gaming growth in underpenetrated markets (Latin America, India, Africa).
  • AI could increase leisure time, leading to greater demand for entertainment and gaming.
    • “If AI is like taking over other people’s job so people have more time … gaming or any type of entertainment might be like a good way to, you know, just pursue.” (42:25)
• Growth Channels for Gaming
  • Discord: Key for early community building among gaming startups.
  • TikTok and influencer partnerships: Effective for rapid user acquisition, especially younger audiences.
  • User-generated content (UGC) platforms drive viral growth flywheels.
    • “Working with the influencer from the … early stage of the product development is like a really, really key…” (44:57)
• For Aspiring Investors
  • Start early; learn by doing, not just reading.
  • Diversify: Build a portfolio of 10–20 investments, not just one or two.
    • “You have to build your … own style, like investment style. … You can’t really learn on paper like how to invest so you have to actually do it.” (41:26)

Life and Career Advice (46:40–48:05)

• Persistence, Vocalizing Goals, and Seeking Help
  • Be consistent and vocal about your ambitions—don’t be afraid to ask for help.
    • “Be consistent, vocal and asking. Don’t afraid to be like. Don’t afraid to help the. Ask for the helps for the other people.” (47:42)
• Growth is Incremental
  • “It's almost like building a house. Right? It's like one brick at a time. Right. And it takes, it takes multiple attempts, probably multiple levels of rejection.” (47:50 - Host)

Notable Quotes

• On organic growth in gaming startups:
  “We try to look for the founders with that kind of mindset … building community is like the right way to do it.” (22:00, Teppei)

• On voting process at GFR:
  “We have those overruling voting system where … up to like certain amount per partner so he or she can make a decision without any other partner's agreement.” (18:05, Teppei)

• On starting as an investor:
  “You gotta find [your style] by just investing or by doing it, you don’t. You can’t really learn on paper like how to invest so you have to actually do it.” (41:26, Teppei)

• On life advice:
  “Just be consistent and also like vocal about what you want to do, maybe somebody can help you to … pursue the dreams … Don't afraid to help the. Ask for the helps for the other people.” (47:42, Teppei)

Key Timestamps

• [01:42] Teppei's early background and Iowa experience
• [09:35] Entry into Mitsubishi, exposure to startups
• [12:51] Working with and insights on corporate VCs
• [16:11] Investment process at GFR, team dynamics
• [18:05] Overruling credit and decision-making
• [21:27] Criteria and deal-breakers for gaming startups
• [25:19] GFR Fund history and strategy
• [30:12] Gaming industry deep dive: PC, console, mobile, AI impact
• [35:36] Future of arcade and gaming interfaces
• [39:33] Advice for new investors
• [42:25] Macro trends: AI, emerging markets
• [44:47] Effective channels for gaming growth
• [46:40] Life and career advice

Overall Tone

The conversation is thoughtful, candid, and practical—grounded in lived experience in venture, gaming, and global markets. Teppei imparts actionable advice for both investors and founders, with humility and a global perspective. The discussion is rich in details about the inner workings of venture funds, decision-making processes, and the ever-evolving world of gaming technology.