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Seed Capital From Angel Investors: Larry Chaityn, Keiretsu Forum, New York Tri-State Chapters President (Part 1)

Posted on Friday, Sep 3rd 2010

By guest authors Irina Patterson and Candice Arnold

This is the twentieth interview in our series on financing for entrepreneurs. I am talking to Larry Chaityn, president of New York Tri-State Chapters, the Keiretsu Forum.

Irina: Hi, Larry. Let’s start with your background and then go to the point where you got involved with the Keiretsu Forum.

Larry: My background is in technology consulting, and I have worked for companies like Capgemini and Oracle, dealing with CEOs and CFOs on mapping business strategy and leveraging technology.

I was in the consulting group for both those companies, and I would go out and understand what the business challenges were for Fortune companies then come back and put together solutions using technology to help companies either solve their business problems or initiate new strategies. That was in early 2000s.

Irina: So, how did you arrive where you are with the Keiretsu Forum?

Larry: I was, for a couple of years, on my own, had a consulting firm and we did work for private equity and venture capital companies helping their portfolio companies to accelerate. So, we would be brought in, a venture capital company would say, “Hey we invested x millions in this company, they’re not meeting expectations, can you go in and take a look?”

I’ve got a Six Sigma background, also balanced scorecard. Those are just frameworks that people use to figure out how to execute strategies. So, during 2008–2009, when the economy started to go sour, companies still needed the services but they didn’t have any funding to pay for it.

So, I thought well, that’s what companies really need. Banks aren’t lending. What would happen is we would help these companies and then we would start to call private equity investors to say, “Hey, we just helped this company and they’re looking for funding. Are you interested? Can we bring them in?” And that was just a long process.

So, over lunch I was talking with a colleague and I said, “I wish there was some kind of venue where I could bring companies that we’ve just helped in to present to investors because this calling one by one is just so time consuming.” And this guy said “Oh, you mean like the Keiretsu Forum?”

And I was like “What’s that?” So, I got on their website, did some research. It looked like the venue that we were looking to bring our companies to. So then I started to talking with Randy [founder and CEO of the Keiretsu Forum], really liked his process and opened up the New York chapter.

We launched March 31, 2009. Since then our members have funded seven companies in just over a year, and we’ve got a couple more undergoing due diligence right now. So, I love it. It’s fulfilling.

When you can help a company get funding, it’s rarely about the company’s product or service – it’s really how they’re going to be able to execute the strategies – and then helping them put together an investor presentation that really conveys, properly conveys, their message.

That’s where we find most entrepreneurs falling down and not getting funding is not because of the product, not because of the service, they are just not able to convey what they do and how they’re going to do it to investors.

Irina: Why do you think that is?

Larry: They don’t teach you that in business school, how to present to investors. It is much different from a product presentation.

You have to convey to the investors that, first and foremost, you’ve got the management team that’s able to execute the strategy and grow the company.

Then it’s what’s the business problem that we’re trying to solve, why isn’t it being solved currently, how we do it differently?

Then it’s describing the revenue model and how we’re going to execute the strategies through sales and marketing, branding and PR, and then what’s the exit strategy, possible acquisitions and that’s not really taught anywhere.

So, we initially see presentations that are just too much product focused and not about how the company is going to grow, and why it will be good for an investor, so we help the entrepreneurs with that.

Irina: Excellent. So, what is your geographical focus?

Larry: We help companies in what we call the Northeast corridor. So, really from Boston down through Northern Virginia is our focus.

This segment is part 1 in the series : Seed Capital From Angel Investors: Larry Chaityn, Keiretsu Forum, New York Tri-State Chapters President
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Very interesting reading!

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Ashley Tuesday, September 7, 2010 at 3:46 AM PT