What is the definition of a Keiretsu Forum member?
Membership is by invitation only. Members are “Accredited Investors” as that term is defined in Regulation D under the Securities Act of 1933 and under other applicable securities laws and regulations. A Keiretsu Forum member is:
- An active private equity investor.
- A trusted, honest, and respected member of our business community.
- A contributor of time, wisdom, and expertise to our funded and soon to be founded companies.
- Enjoys building relationships with other members and the companies our members fund.
What is an accredited investor?
Under the Securities Act of 1933, a company that offers or sells its securities must register the securities with the SEC or find an exemption from the registration requirements. The Act provides companies with a number of exemptions. For some of the exemptions, such as rules 505 and 506 of Regulation D, a company may sell its securities to what are known as “accredited investors.” The federal securities laws define the term accredited investor in Rule 501 of Regulation D as:
- a bank, insurance company, registered investment company, business development company, or small business investment company;
- an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
- a charitable organization, corporation, or partnership with assets exceeding $5 million;
- a director, executive officer, or general partner of the company selling the securities;
- a business in which all the equity owners are accredited investors;
- a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person;
- a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
- a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.
For more information about the SEC’s registration requirements and common exemptions, read our brochure, Q&A: Small Business & the SEC. http://www.sec.gov/answers/accred.htm
Do I have to be an accredited investor to join Keiretsu Forum?
Yes, all Keiretsu Forum members need to be accredited to join, renew, and maintain their membership status.
We invite angel investors interested in learning about the benefits of Keiretsu Forum membership to attend one of our meetings first as a guest. This will provide you with an opportunity to see our process and for us to meet in person. After you have attended a Keiretsu Forum meeting, the next step is to complete our membership application and to schedule a meeting with the local Chapter President to discuss your investment interests. Membership is by invitation only. Invitation is extended to active investors that are respected members of the business community.
Is there a minimum investment amount per year?
No, there is not. We believe that the members should invest in the deals that present at Keiretsu Forum only if they are satisfied with their due diligence and if the deals fit their investment strategy, and not because they need to “meet a minimum”. The individual investments members make in a specific deal are in the $25K to $500K range.
Can I attend a Keiretsu Forum meeting as a guest?
Yes, we invite angel investors interested in learning about the benefits of Keiretsu Forum membership to attend one of our meetings first as a guest. This will provide you with an opportunity to see our process and for us to meet in person. Please see the calendar of upcoming events.
We recommend to our new members not to invest in the first 6 months of their membership. As you are getting involved in the Keiretsu Forum activities this 6-month initiation period will give you an opportunity to participate in the due diligence process and collective mind-share atmosphere of Keiretsu Forum.
What is the membership structure?
90% accredited private equity (angel) investors, 5% venture capital firms and corporate investors, and 5% sponsors and Forum Resource Members (FRM). The qualifications for this membership are:
- Accredited and private equity Investor first, and
- May provide a service to the presenting companies and to the Keiretsu Forum membership. An example of these services may include: investment banking, M&A, marketing, financing, re-structuring, and general consulting services.
How many members does Keiretsu Forum have?
We are a global angel investment network. When a member joins a local chapter they become a member of the global network of over 2,500 angel investor members world-wide. Each chapter is limited to 150 members to allow for the members to get to know each other and to maintain close collaborative relationships. When a chapter reaches capacity, if there is a critical number of investors nearby, we evaluate the opportunity to launch a new chapter to accommodate investor member interest. For the number of members of a specific chapter, please contact the local Chapter President.
Does Keiretsu have co-investment funds for members and non-members to invest in?
Yes, Keiretsu Capital is the exclusive worldwide fund partner of Keiretsu Forum and manages angel co-investment, venture and real estate funds for its investors. These funds are a benefit of membership but are also open to non members investors. To learn more visit www.keiretsucapital.com.
When did Keiretsu Forum start?
Keiretsu Forum was founded in September 2000 by Randy Williams in the San Francisco East Bay.
How many chapters does Keiretsu Forum have?
Keiretsu Forum has 52 chapters on 3 continents (North America, Europe, and Asia). To contact the local chapter that is closest to you, please visit the contact page.
What are the benefits of being affiliated with Keiretsu Forum as a global network?
Our community of global chapters enables:
- Support of our portfolio companies and presenting entrepreneurs with equity and resources in different capital markets.
- Building additional quality deal flow for our members.
- Our members to enjoy collaborative business and social relationships among chapters.
- Job creation and economic impact in the communities where we have presence.
We have shifted the paradigm of local angels investing locally, and we are supporting entrepreneurs with capital and resources globally.
Application & Presentations
What is the selection process for companies that present to the Keiretsu Forum?
- Complete on-line application
- Committee pre-screening (software, telecom, life sciences, automation & instrumentation, media/entertainment, real estate)
- Selected companies present to a deal screening (15-min presentation, 7-10 companies, the number of members in attendance depends on the specific chapter)
- Keiretsu Forum meeting (20-min presentation, 4-5 companies, the number of members in attendance depends on the specific chapter)
- Due Diligence (takes anywhere from 2-3 weeks to 5-6 months depending on the company’s industry and stage. Members collaborate in the due diligence but invest as individuals)
- Multi-Chapter Investing (companies that receive investment traction from one chapter may present to other chapters for additional funding).
What are the investment criteria?
Some of the investment criteria used to evaluate investment opportunities that come to the Keiretsu Forum are:
- Revenue is sustainable and recurring.
- Sustainable margin expansion.
- There is pain: a need with customers clamoring to pay for a solution. Existing paying customers.
- Market opportunity – initial vertical market has to be large and compelling.
- Sustainable competitive advantage with no foreseeable threats from disruptive technologies or other players.
- Experienced and driven management team with mix of technology skills for proper execution. Clear successes and failures we can see and discuss.
- Pre-Money valuation has to be negotiable.
- Proprietary products or channels of distribution with no foreseeable threats from competing methodologies, technology or channels.
- The company has to be profitable within 2 years and more importantly this is the last round to profitability.
- Long-term cash generation capability. Within 3 – 4 years from inception, the company should be able to have the capability to fund itself from internal cash flow in the absence of continued funding.
- Exit strategy.
- Intellectual Property – clearly defensive and protected.
- Knowledgeable Board of Directors with proper mix of strategy, technology and operational skills to support the management team.
What is the industry of companies presenting?
Forum members invest in high-quality, diverse investment opportunities in emerging technologies, life science/healthcare, clean technology, consumer goods, real estate, and any other segment with high growth opportunity.
What is the stage of companies presenting?
Companies that apply to Keiretsu Forum are typically in their A or B rounds. They usually have received $250K to $500K from the founders, friends, family and individual angels before they reach us.
What materials do we need to bring at the Deal Screening?
No materials are needed. At the Deal Screening the Keiretsu Forum team will provide each attendee a copy of the Executive Summary that the entrepreneur has provided to them. While the presentations are played from a Keiretsu Forum laptop, it is recommended that an additional copy of the presentation is carried on a flash drive as a backup.
When do we have to arrive at the Deal Screening and the Forum?
You will have the Agenda and the time when your company will present one week prior to the Deal Screening / Keiretsu Forum investor meeting. We suggest that you arrive at least 1 hour before you are scheduled to present and take under consideration the traffic conditions and the time it takes to park and find the meeting conference room.
When will we know whether our company has been selected to present at the Forum?
Keiretsu Forum staff will follow up with you no later than the following day of your presentation at the Deal Screening. In addition to the decision, we provide feedback from the member discussion on your company.
What materials do we need for the Forum?
Keiretsu Forum staff prepares a Booklet for the Keiretsu Forum, which has all the required materials, including the Executive Summary of each company that has been provided by the entrepreneurs.
Are we going to run the presentation from our company’s laptop?
All presentations are run from the Keiretsu Forum laptop and LCD projector. You will have to e-mail us your Power Point or Keynote presentation before the Deal Screening and Keiretsu Forum investor meeting so that we can upload it on our laptop and enable smooth transition of the presentations. As a back-up, you are asked to have the presentation on a USB drive.
How long are the presentations?
Deal Screening: 15-minute presentation on 7-10 Power Point slides (7-minute core presentation followed by 8-minute Q&A) Keiretsu Forum: 20-minute presentation on 7-10 Power Point Slides (10-minute core presentation followed by 10-minute Q&A)
Is there a presentation fee to the Keiretsu Forum?
There is no fee to apply, to be pre-screened and to present at the Deal Screening meeting. However, if at the Deal Screening meeting your company is selected to present to the full Keiretsu Forum, there is an administrative fee in order to defer a portion of the management and organizational costs. Also, the administrative fee serves as filter system. Please contact the Entrepreneur Director of the chapter where you are applying for more information.
Does the Keiretsu Forum take commissions from Keiretsu investments?
In the United States and Canada Keiretsu Forum does not take any warrants or commissions for capital raised through the Forum.
How large are the investment rounds?
Keiretsu Forum does not invest as a fund. Members make individual investment decisions. The rounds have been from $250K to $2M. The individual investment amounts are from $25K to $500K. The largest investment an individual member has made was for $2M. If you receive financial traction from the Keiretsu Forum, you will be receiving individual checks from members.
How many companies that presented to the Forum have achieved funding directly from Keiretsu activities?
Please take a look at the list of portfolio companies. The investment interest that the companies receive depends on the specific company, industry, management, stage and other factors. What we’ve been able to see from past presentations is that there are 7-10 companies that present at the deal screening, 4-5 of them are selected to come to the full Keiretsu Forum meeting and 1 or 2 of them receive investment traction from the Keiretsu Forum members. Again, investment traction depends on a number of factors and is different for each meeting for different chapters. Please review the list of recently funded companies.