SUB CATEGORIES OF Funding Your Startup

Keiretsu Forum is a community of approximately 1,100 angel investors which invest in small businesses, but not necessarily startups. As of October 2013, the Forum has 18 chapters in the U.S., including in Northern and Southern California, Seattle, Philadelphia and New York. They also have some branches scattered across the globe in places like Singapore, Beijing, Shanghai, Barcelona, Madrid, France and England. The Forum focuses on companies in emerging technologies, life sciences, health care, real estate and biotech.

The term ‘keiretsu’ is a Japanese word which refers to a group of partner or affiliated organizations that boast a broad contact base and considerable influence over particular industries. The Keiretsu Forum claims to have some elements of keiretsu in its operations. The Forum claims to admit members on an invite only basis, but in our experience it is relatively easy to become a member if an individual is willing to make the requisite investments in companies each year. The Forum is a collection of angel investors and not an investment fund itself. Forum members evaluate investments and share information with each other, but their investment decisions are purely personal.

The Forum was created in 2000 by entrepreneur Randy Williams. As of October 2013, the Forum members have invested approximately $180 million in 200 companies since the Forum’s inception.

Investment Criteria
Companies that are funded by Keiretsu Forum members are typically in their series A or B venture rounds, have raised between $500K to $1.5m and have revenue and are seeking $500K to $2m in growth capital. The Forum is not an early stage angel investor.

The Keiretsu Forum say that their ideal target companies have strong management teams, proprietary IP that is defensible, defined and large markets, solve known market needs, have founders and executives who have invested personal capital, understand how much capital they will need and how the capital will be used and have thought about possible liquidity strategies.

The Investment Process
To apply to present at the Keiretsu Forum, a company completes an on-line application and pays an application fee reportedly of $1,500 per chapter and must apply to present to a minimum of three chapters (minimum fee of $4,500). The Forum is often criticized for its high fees relative to other angel groups.

After a company has presented to the chapter in the closest geography and has received investment interest traction from members of that chapter, the company then has the opportunity to present to other chapters in the Forum’s global network (but has to pay additional fees to do so).