Jason Jihad: Keiretsu Forum Must be Stopped!

Thank you for doing this!! These guys tried to get my company to present a few years ago. I absolutely hate the idea of paying to present. It’s disgusting.

[...] Jason–calling it a jihad–asked people reading his blog to post their experiences with the group. Other groups here like the Tech Coast Angels and the Pasadena Angels, do not charge, and members of the groups there tell me they don’t look very highly upon others charging fees to startups. Joe Platnick of the Pasadena Angels has written up a good article about whether or not groups should charge fees to present. [...]

Jason: As I understand it, the folks that started Kerietsu Forum as are
are the same folks that stared the Tech Coast organization
during the dotcom boom (Not to be confused with TCVN or OCVG).
Tech Coast was known for taking equity in companies in return
for making introductions to angel groups…

Let’s just say that Tech Coast was a spectacular failure.

Jason, I believe you have a rather serious misconception about
Randy Williams and the Keiretsu Forum. I have been around
Silicon Valley since 1979, and have made the rounds on Sand
Hill many times during that period, from Douglas and Michael
at Sequoia, Roger Evans at Greylock, on down the list, investing
as an LP in several leading venture funds. Since 1994 I’ve been
a serial entrepreneur, starting 4 companies including the Silicon
Valley Networking Lab which I sold to HP-Agilent in 2000. Since
2000 I’ve continued as a serial entrepreneur, and also as an Angel
Investors.

Since joining the Keiretsu Forum in Feb of this year (I’ve attended
every meeting since July 2008), I’ve gotten to know Randy Williams
very well. In my 30 years in Silicon Valley, I’ve found him
to be one of the most upstanding, honorable, and ethical people
I’ve met in the Valley. Randy is heavily involved in Charities,
and is a blast to spend a half day a month with in the K4 meetings.
I’ve been so impressed with the K4 process, I’ve talked Randy
into working with me to write a book about the history of the
group, all their investments, and their charity-based business
ethos.

I think you may have been mis-informed about how the Keiretsu
Forum works. Raising money in the K4 is roughly a 90-day process.
The entrepreneur does not pay a fee (varies by region) until the
mid-point in that process, at which time they have cleared many
deal-screening and early diligence hurdles, and they are about
to present to the full K4 (4 chapters in the Bay Area, 18 worldwide,
and 850 members WW). At that point in the process, historically,
their odds have been 50 to 60% of receiving funding from K4 members>

Also, I should note that Randy’s organization employs 49 people
full-time. I have spend a number of days at their office in
Lafayette, and it is very much a heavy-lifting, full-time, global
operation to keep everything on track with all the startups applying
to and going through the 18 chapters. Frankly, as a small business
person myself, I”m amazed they can stay cash flow positive after
collecting only $3k per year per member, and $1 to $6k per startup
in gross revenues. They definitely are providing an excellent
value to the startups that present, in my experience.

I’d welcome the opportunity to meet with you in person and go into
more depth. It pains me to see a very prominent, respected person
like yourself bashing such a first-class guy as Randy. He is one
of the most positive, gifted people I’ve had the pleasure to know,
in the world of technology business.

Sincerely,

Steve Bell
Founder & CEO
Startup Trek TV, Inc.

Part-time Lecturer, Entrepreneurship & Innovation
Cal Poly Orfalea School of Business

Member, Keiretsu Forum
Silicon Valley Chapter

(408) 410-3857
steve@startuptrek.net
http://startuptrek.net/about

Jason, I’m glad you’re calling attention to this. You’re becoming an evangelist now for entrepreneurs that have been dealing with this for years and years. I have a list of angel groups that charge fees, from Keiretsu to the do-gooders over at Investor’s Circle. Over the past 4 years I’ve seen fees range from $150 to a few thousand. It’s absolutely nauseating! Don’t stop the jihad man – this is one that can mobilize an army.

[...] of money to pitch to them, and it’s not someone with a weak microphone or unknown following. Jason Calacanis has announced a “jihad”, as it seems, and is stirring things up. This topic is not a new one for entrepreneurs like myself [...]

the keiretsu video above,looks like a TV infomercial by a used car salesman !

First ,with blood and sweat you, as an enterpreneur build a business,against all odds.

Then you try to go against big competitors ,take risks ,share equity with VCs.

In middle of all ,there are these hyenas like “Keiretsu” who sit on sidelines waiting to take a piece of your pie.
It is obnoxious and unethical.
WHY THE HELL SHOULD I PAY TO PRESENT MY PRODUCT – AM I GETTING A SALE ?

[...] Mon-Oct-12: following up on a comment left by Benjamin Kuo on an earlier post by Jason I came across two good posts by Joe Platnick of the Pasadena Angels, (I have highlighted some key [...]

[...] under FreedomSpeaks, Web/Tech I’m writing publicly here to support Jason Calacanis’ jihad against angel investment groups and venture capitalists forcing entrepreneurs to pay to present their ideas. These organizations are an abomination, and I [...]

Fortunatly I’ve not run across Keiretsu. But I did fall into the trap of a similar company making the same promises. New entrepeneurs and start up companies often spend thousands of dollars doing research, proforma, business plans, executive summaries, etc. The passion we have to share our creative ideas with potential investors can cloud the decision making of those with even the strongest business acumen. I’m living proof of that.

If in your desperate serch for funding you come acrosse any organization that claims to represent thousands of potential investors, with promises of start up capital…”for a fee”. JUST WALK AWAY!

Find new avenues, network where investors hang out, research the internet for VC blogs…etc. But do not pay one of these hustlers to do what you can do yourself.

Here is a question. How do you feel about DOMAIN ACQUISITIONS. I’m a student, doing a podcast for student NURSES. The people who take care of you when you are SICK. I bought http://nursingideas.ca and thought I’d ask about .com because it is currently just being squatted on. The guy wants me to pay $1,000. What a joke.

First of all, there is no humanism considered, to the fact I’m a student, I’m doing it part time and not as a business.

That is a 1/3rd what Keiretsu is charging, and is a dishonourable (Canadian spelling). Especially when #TWiST guests like @Garyvee prove that you don’t to pay marketers or domain squatters.

So now that you have almost won victory with Keiretsu, I BEGIN a JIHAD on domain acquisitions. Or let me know why I’m way off base with this.

I’m watching with interest your current confrontation of Keiretsu. I don’t have a dog in this hunt, not being an investor or (in any real sense) an entrepreneur.

What you say about paying to present seems intuitively correct. Keiretsu reminds me of the very few days I spent in Amway. It reminds me a bit more of the old-school style of “vanity publishing.” Does the author actually get books printed? Sure. Does anyone other than the author and their Mom ever see a copy? Nope. In the real world, vanity publishing isn’t publishing. And, I strongly suspect, Keiretsu isn’t much of anything, either.

I dunno from my own experience on this, but I trust you.

Griz

Jason,
You seem to have some misinformation about the Keiritsu Forum that is coloring you views on what it is and how it operates.

First, they do not guarantee anything other than the entrepreneur will be given time to give a 10 minute presentation followed by a ten minute Q&A session in front of one or more groups of angels.

Second, the angels are for real. Every one of them is required to fit the legal definition of “Accredited Investors” as defined by the Code of Federal Regulations.

Third, as mentioned in another response above, they actively filter out weak applicants before any money is charged. This has benefits for both the angels (the presenters are not total flakes) and the entrepreneurs (they meet a minimum level that makes them realistically fundable by the angels.

Fourth, a significant number of entrepreneurs who qualify to present and then pay the fee do get funded. The exact percentage varies widely, depending among other variables on the current economic conditions and which Keiritsu group they are presenting to, since different locations tend to have somewhat different industries of interest. However, Keiritsu does write checks. Visit their web site to see a partial list of companies that received funding each year over the past several years.

Finally, no one is forcing the entrepreneurs to go to Keiritsu Forum to raise funds. There are numerous, high-quality angel organizations, such as the Tech Coast Angels, which do not charge presenters. Whether Keiritsu offers sufficient value for the fee they charge is a decision that each entrepreneur must make for himself.

In summary, Keiritsu Forum is a legitimate facility for small and start up companies to get in front of qualified angels in an attempt to raise money from angel investors. Yes, they charge for their service, and no there is absolutely no guarantee that those angels will fund you, but it is not a sham operation. They have funded a lot of entrepreneurs and do have angels with real money to fund more companies. There are some really sleazy angel-introduction groups out there, but I do not believe that the Keiritsu Forum is one of them.

However, do not take my word for it. I suggest that entrepreneurs who are seeking investors should contact the local chapter of the Keiritsu Forum and ask to visit a meeting. They are typically held monthly and serious guests are normally quite welcome. You will get to see the process in action and will have a chance to meet some of the angels who are in attendance. Also, ask to talk to some firms that recently received funding through Keiritsu to understand how they saw the process.

[...] $25,000 on an ad buy in hopes of filling a sales funnel, should we declare “jihad” (Jason Calacanis’s words) on Google Ad [...]

[...] entrepreneurs to pitch to VC is an absurd thing. With the recent Jason Calacanis’ Jihad over such acts in the States, the phenomena of VCs and Angels who charge exorbitant fees for [...]