Comments on: Say “hiya” to the Keiretsu Forum http://www.coloradostartups.com/2007/03/18/say-hiya-to-the-keiretsu-forum/ The Startup Blog Network Wed, 10 Mar 2010 17:08:54 +0000 http://wordpress.org/?v=2.7 hourly 1 By: The Keiretsu Forum one year later : Colorado Startups http://www.coloradostartups.com/2007/03/18/say-hiya-to-the-keiretsu-forum/#comment-1523 The Keiretsu Forum one year later : Colorado Startups Mon, 03 Nov 2008 18:41:35 +0000 http://ColoradoStartups.com/2007/03/18/say-hiya-to-the-keiretsu-forum/#comment-1523 [...] covered the fact that the Keiretsu Forum (”the worlds largest angel investor network”) had opened up a chapter in Colorado. There are currently 17 chapters of the Keiretsu Forum [...] [...] covered the fact that the Keiretsu Forum (”the worlds largest angel investor network”) had opened up a chapter in Colorado. There are currently 17 chapters of the Keiretsu Forum [...]

]]> By: Steve Murchie http://www.coloradostartups.com/2007/03/18/say-hiya-to-the-keiretsu-forum/#comment-1120 Steve Murchie Mon, 19 Mar 2007 14:20:41 +0000 http://ColoradoStartups.com/2007/03/18/say-hiya-to-the-keiretsu-forum/#comment-1120 Hi David -- It was good to chat with you finally. I think you make a good point about the fee structures, but one also has to look at the value received. Across our organization, the presentation fees scale with the number of investors active in each chapter – so a chapter with 150 members will charge more than one with 25. This achieves a couple of things: 1) a large membership will generally see bigger and higher-quality deals; and 2) the entrepreneurs’ costs will reflect their access to active angel capital. Yes, this does tend to winnow out very-early stage startups, but we’ve always said that we lean toward more mature teams with some funding already behind them. When you consider that the gap in available startup capital spans $250K to $5M (i.e., between friends-and-family and the VC tier), I think we fill a critical niche. It’s also very important to us that we provide value to the entrepreneur at every stage of their application: pre-screening, in-person screening, Forum presentation, due diligence, and post-funding. Many of our applicants walk away with advice and assistance but no funding, only to come back later and receive the funding they need. In a company I ran recently, I applied to a number of angel organizations and the norm was to pay a fee prior to screening – only to receive a “thanks but no thanks” form mail with no feedback. To their credit, Keiretsu Forum members didn’t give me any funding either, but the feedback and insights were invaluable to rethinking our strategy. I’ve heard this a lot from prior applicants, and my job here is to make sure that all the participants – angel and entrepreneur – receive the same value for their time and money invested. Steve Hi David –

It was good to chat with you finally. I think you make a good point about the fee structures, but one also has to look at the value received.

Across our organization, the presentation fees scale with the number of investors active in each chapter – so a chapter with 150 members will charge more than one with 25. This achieves a couple of things: 1) a large membership will generally see bigger and higher-quality deals; and 2) the entrepreneurs’ costs will reflect their access to active angel capital. Yes, this does tend to winnow out very-early stage startups, but we’ve always said that we lean toward more mature teams with some funding already behind them. When you consider that the gap in available startup capital spans $250K to $5M (i.e., between friends-and-family and the VC tier), I think we fill a critical niche.

It’s also very important to us that we provide value to the entrepreneur at every stage of their application: pre-screening, in-person screening, Forum presentation, due diligence, and post-funding. Many of our applicants walk away with advice and assistance but no funding, only to come back later and receive the funding they need. In a company I ran recently, I applied to a number of angel organizations and the norm was to pay a fee prior to screening – only to receive a “thanks but no thanks” form mail with no feedback. To their credit, Keiretsu Forum members didn’t give me any funding either, but the feedback and insights were invaluable to rethinking our strategy. I’ve heard this a lot from prior applicants, and my job here is to make sure that all the participants – angel and entrepreneur – receive the same value for their time and money invested.

Steve

]]> By: David Cohen http://www.coloradostartups.com/2007/03/18/say-hiya-to-the-keiretsu-forum/#comment-1119 David Cohen Mon, 19 Mar 2007 02:37:03 +0000 http://ColoradoStartups.com/2007/03/18/say-hiya-to-the-keiretsu-forum/#comment-1119 Correct, I'm sure the vast majority of the costs are paid by the dues/fees as you suggest. I believe the cost to the entrepreneur to pitch is $1000 but I was not sure so I didn't say that in the post. Perhaps Steve will clarify. Also, I don't think it's "profiteering" at all - they are providing a valuable service. I just personally think charging the presenters should be avoided. The goodwill that they'd receive in exchange would be enormous. I suppose the money also provides a screening process - those that can't/won't pay are perhaps not serious enough. Just something that rubs me the wrong way, but as I said in the post it could be intelligently argued that it's the right way to go. Just not the way I would choose to go. Correct, I’m sure the vast majority of the costs are paid by the dues/fees as you suggest. I believe the cost to the entrepreneur to pitch is $1000 but I was not sure so I didn’t say that in the post. Perhaps Steve will clarify. Also, I don’t think it’s “profiteering” at all - they are providing a valuable service. I just personally think charging the presenters should be avoided. The goodwill that they’d receive in exchange would be enormous. I suppose the money also provides a screening process - those that can’t/won’t pay are perhaps not serious enough. Just something that rubs me the wrong way, but as I said in the post it could be intelligently argued that it’s the right way to go. Just not the way I would choose to go.

]]> By: James D Kirk http://www.coloradostartups.com/2007/03/18/say-hiya-to-the-keiretsu-forum/#comment-1118 James D Kirk Sun, 18 Mar 2007 23:11:54 +0000 http://ColoradoStartups.com/2007/03/18/say-hiya-to-the-keiretsu-forum/#comment-1118 Hey David, you almost have to look at the charging of fees to pitching companies from another lens as well: to wade through the yahoo's and something for nothing wannabes. What's the saying? "You can't get something for nothing"? And this goes both to both sides as I am sure the investors in this club (via their dues/fees) do bear a substantial proportion of the cost of facilitating meetings. Without knowing what the actual application fee is, it's hard to determine whether or not a profit motive exists, though without knowing the amount, if it were exorbitant to the entrepreneur, I'd err on the side of staying away from that particular angel network/group. Hey David, you almost have to look at the charging of fees to pitching companies from another lens as well: to wade through the yahoo’s and something for nothing wannabes. What’s the saying? “You can’t get something for nothing”?

And this goes both to both sides as I am sure the investors in this club (via their dues/fees) do bear a substantial proportion of the cost of facilitating meetings. Without knowing what the actual application fee is, it’s hard to determine whether or not a profit motive exists, though without knowing the amount, if it were exorbitant to the entrepreneur, I’d err on the side of staying away from that particular angel network/group.

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