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Seed Capital From Angel Investors: M. Todd Dean, Keiretsu Forum, Northwest Chapter President (Part 1)

Posted on Saturday, Jun 19th 2010

By guest authors Irina Patterson and Candice Arnold

This is the seventh interview in our series on seed financing and angel investing. I am talking to M. Todd Dean, Keiretsu Forum’s Northwest Chapter president.

Irina: Hi, Todd. Please tell us about yourself.

Todd: I was in insurance for about ten years, and then through a divorce, I stumbled into a startup company. Some friends and I invested in the company, and I worked for the company for about a year and a half, and it went bankrupt. And the reason it went out of business was leadership and the CEO of the company. So, that was my first induction into angel investing, which was in 2002.

I went off and helped fund a number of startup companies in Seattle. And I decided to start a venture fund in Seattle because in the Seattle Northwest community, we’re very fertile and are fortunate to have a lot of startups.

We also are blessed to have a lot of capital, but there’s a huge disconnect between the two.

I decided to start a venture capital fund to help bridge that gap. Then I heard about Keiretsu Forum from a local entrepreneur who called me up and said, You need to take a look at this group and meet with Randy.

I flew down and met with Randy Williams (the founder and CEO of Keiretsu Forum; interviewed here) in March 2005. After many meetings and discussions with Randy, and after attending a forum in the Bay Area, I realized that there’s nothing like this in the Northwest.

I flew back and called some friends and said, What do you guys think of this Keiretsu Forum? And they said, How do you say it? And I said, Keer-itsu. What does it mean? they said. I told them it meant collaboration in Japanese.

And so, I started Keiretsu Forum in the Northwest.

I launched it in September 2005. I started this Seattle location and then I opened a Bellevue location, which is the east side of Seattle, and then I opened Boise–Sun Valley, [Idaho], and then Portland.

In four years, we’ve been able to invest a little over $52 million in over 92 companies.

I think it works for a few reasons. First and foremost, it’s because of who the members are. The majority of our members are active investors. That doesn’t mean that they invest in a lot of companies, but they certainly invest in a few.

We have other members who are very active investors who invest in multiple companies – I’d say ten to twelve companies per year. It’s a good mix of individuals, and it’s also a good diversity of backgrounds. You have everything from technology to real estate to biomedical. You have a cross section of industries, as far as who our investors are.

The second big component is the syndication. There is no way we would’ve been able to fund and get the quality of companies that we were able to get in the Northwest without the Bay Area.

The Bay Area has four chapters. We have four chapters in the Northwest, and so we’re able to send companies back and forth. And that’s how we’re able to invest so much capital per company.

It’s very common for our members to invest anywhere from $500,000 to $3 million, $4 million, $5 million, or $6 million per company. It’s unusual for any type of angel organization to be able to invest that amount of capital.

This segment is part 1 in the series : Seed Capital From Angel Investors: M. Todd Dean, Keiretsu Forum, Northwest Chapter President
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Great post, I like the name Keiretsu and the meaning of collaboration. It is amazing to see how much investment has gone into collaborative sharing technologies and the explosion of companies since this blog was posted. Companies like DropBox and were hardly known then, but look at them now.

Shadrach White Wednesday, September 14, 2011 at 6:02 PM PT