Keiretsu Forum To Drop Fees For Early-Stage Startups
The angel network is asking chapters to waive their presentation fees for “true startups” — companies that have no revenue and less than $500,000 in capital and are trying to raise less than $500,000 from investors, said Randy Williams, Keiretsu’s founder and CEO.
Williams said the change is not a response to the recent attacks on the fees launched by investor Jason Calacanis — who has promised to start his own angel network on Monday, November 16, unless Keiretsu and several other angel groups drop their fees — but have been in the works for several months. Keiretsu also has no plans to drop fees for other entrepreneurs.
“The companies that resonate with our investors are the ones that have revenue — that’s what we can validate due diligence on, talk to customers and see if they’re growing, because our investors only make money when the company scales,” Williams said.
However, Keiretsu’s process has tended to shut out early-stage companies, he said. They often don’t get to present because investors don’t vote to hear them. So the forum is planning events where early-stage startups will be able to attend and exhibit for free.
“I think a lot of our members like to see all types of deal flow,” he said. “We want the whole ecosystem there,” not just “the entrepreneurs with millions in the bank who want expansion capital.”
Williams said Keiretsu will formally announce the events soon.
Calacanis, meanwhile, has continued his campaign against angels who charge, asking entrepreneurs today to boycott the 2009 New York Venture Summit and soliciting complaints about the Keiretsu Forum and other angel groups on his Webcast, This Week In Startups.
One angel investor, Steve Bell, went on the show Friday to defend Keiretsu and its business model, although the conversation deteriorated after Calacanis started conducting the interview with a plastic gun in his hand.
“I called Doug Leone (at Sequoia Capital) and asked ‘what’s wrong with this guy,’ I think you went off the deep end,” Bell said to Calacanis at one point. “You’ve deeply antagonized 850 people and they’re middle class — you’re the rich guy. (Calacanis has sold two companies, one to AOL for a reported $25 million). It amazes me that you can libel and slander.”
Bell has also blogged about the fees Calacanis and Mike Arrington charge for companies to attend their conference for startups, TechCrunch50, which Bell claims can run into the thousands of dollars.
The Calacanis-Bell encounter is embedded below — if you watch it, skip the first hour or so.
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Tom Mancino said on October 20, 2009
Nope, doesn’t look like a response to the attacks by Jason at all…..pure coincidence.
Jason said on October 21, 2009
Tom… funny.
Deborah: Thanks for calling/emailing me to be quoted in the story. :-p Seriously, kind of a one-sided story (again) without asking me for a quote. You have my email! jason at mahalo.com or my mobile 310-456-4900.
Arnie Bogart said on October 21, 2009
Jason is annoying as hell but at least he’s doing what he can to help startups.
AH said on October 21, 2009
So let me get this straight, Keiretsu won’t invest in anyone not showing revenue. But you can present for free at their events only if you don’t have any revenue? If you do have revenue, they might be interested in you, but you have to pay thousands of dollars to present? Sounds like more of the same. I still vote for the alternative Keiretsu Forum investor event.
It might actually be fun to compare deals that get consummated at the alternative venue to those at the pay-to-present Keiretsu event. Which one actually produces more results?
bob said on October 21, 2009
Who is Steve Bell and why would anyone care what he has to say? I still would like to see how many presenting companies get funding probably a very small %. They also used to have real estate developers present projects, wonder if they still do?
Lili Balfour said on October 21, 2009
I had the same question about Segal’s fees ($15,000 to pitch and $1,500 to be listed in the program). So, I had lunch with him a few years ago to understand his rationale. In summary, it is really designed as a road show platform for later stage companies. He believes that it is advantageous for an energy company based in Texas to fly out for the day and meet with a room full of investors.
I personally don’t believe a company should pay $15,000 to present anywhere, unless it is a nationally acclaimed event like DEMO.
I’ve contacted Mike and asked him to call you. I hope you two can reach a mutually acceptable outcome.