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Seed Capital From Angel Investors: Randy Williams, Founder and CEO, Keiretsu Forum (Part 10)

By guest authors Irina Patterson and Candice Arnold

Irina: You do track your returns internally, right? And it’s about 20%?

Randy: That study was done to the end of 2007. We founded it in September 2000, so it was a seven-year study. The next study is being done right now, and that study will be complete probably at the end of the year. So, the past two years, we have not published those returns yet. But, if you want to Google us and look at all our fundings locally in Northern California, you can see what companies we’re funding, and what are some of the key companies we funded over the past four years. >>>

Seed Capital From Angel Investors: Randy Williams, founder and CEO, Keiretsu Forum (Part 9)

By guest authors Irina Patterson and Candice Arnold

Irina: Do you have any advice for angel-backed companies? What should they do to increase their chances of success?

Randy: Number one, they need to truly integrate and meet the members of the forums that they may be going to and in their markets they know of.

And, I think that they need to find champions within their sectors to help guide them through the labyrinth of angel investing. So, for instance, I encourage companies . . . if you’re a software company, you need to know who’s on the software committee at Keiretsu Forum locally and throughout our chapter system. >>>

Seed Capital From Angel Investors: Randy Williams, founder and CEO, Keiretsu Forum (Part 8)

By guest authors Irina Patterson and Candice Arnold

Irina: What level of experience do you require entrepreneurs to have? Is that important?

Randy: Yes, we really do like experience, as I alluded to earlier. We like the management team to have past experience. Generally, if they have revenue associated with their company when they come to us, they obviously have relationships with customers. And typically, if that’s the case, then they have some type of success or some other background that we can draw upon that brought them to this position of taking this company toward monetization and/or an exit, that we win and they win. So, to answer your question, yes management needs to have a rich track record of building companies and exiting; that’s critical to us. >>>

Seed Capital From Angel Investors: Randy Williams, Founder and CEO, Keiretsu Forum (Part 7)

By guest authors Irina Patterson and Candice Arnold

Irina: How much of a company’s equity do you usually seek?

Randy: It’s usually about 25% of the company is being given out in the form of equity for our capital.

Irina: What’s the typical return you seek and over what period of time? >>>

Seed Capital From Angel Investors: Randy Williams, Founder and CEO, Keiretsu Forum (Part 6)

By guest authors Irina Patterson and Candice Arnold

Randy: Speaking of exits, one of the reasons why we’re growing internationally is because we really want to look at other indexes. We want to look at other exits past, above, and beyond NASDAQ and our indexes here. For instance, we went on a small IPO at £30 million in AIM several years ago, in a pharmaceutical company. >>>

Seed Capital From Angel Investors: Randy Williams, Founder and CEO, Keiretsu Forum (Part 5)

By guest authors Irina Patterson and Candice Arnold

Randy: I think we’re very interactive, a very gracious community, and we care deeply about the entrepreneurial community and we want to give them as much information as possible for future success. And it’s not easy making the forum and if you do the math, if only four or five companies are making it out of 50, it’s still tough to get to Keiretsu Forum. Especially in Northern California, where, obviously, we’re the oldest chapters throughout the three continents and where there is a lot of capital. In fact, I would say that we’ve probably done at least over $100 million in just the past seven years here in Northern California, in capital. >>>

Seed Capital From Angel Investors: Randy Williams, Founder and CEO, Keiretsu Forum (Part 4)

By guest authors Irina Patterson and Candice Arnold

Irina: So, let’s talk about how entrepreneurs can reach Keiretsu Forum.

Randy: The best way, if they’ve never been to Keiretsu Forum, is to go online. We have a very simple process to apply, and then what happens is we then introduce them to a committee that is in their vertical. For instance, software, that would go to our software committee, if it’s a clean tech opportunity, it goes to our clean tech committee, and so forth. >>>

Seed Capital From Angel Investors: Randy Williams, Founder and CEO, Keiretsu Forum (Part 3)

By guest authors Irina Patterson and Candice Arnold

Randy: So, getting back to our revenue model, it’s membership, renewals, and then we rely on sponsors to help us grow and underwrite our employees. Finally, we charge an administrative fee for companies to present, and that fee – in smaller chapters it’s less and in robust chapters it’s more because of the employees and the cost of growing the forum – is approximately $1,500. That’s to present to one chapter. The results we’ve created through this model are, first, it’s a sustainable model, and second, it’s a repeatable model; there is money that is made to underwrite our growth and our employees. And we take a little bit of money from the myriad of sources to which I just alluded – sponsorship, membership renewal, and an administrative fee when a company presents of $1,500 at the forum. There’s no charge for presenting at screening day. And that [fee] can be much less for a newer chapter. For instance, if we just opened a chapter – pick anywhere in the United States – we may have a free component for a year for companies to present to us. So that’s the revenue model of Keiretsu Forum. >>>