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. >>>

Seed Capital From Angel Investors: Randy Williams, Founder and CEO, Keiretsu Forum (Part 2)

By guest authors Irina Patterson and Candice Arnold

Irina: How do these local chapters operate?

Randy: They have great autonomy, but conversely, they enjoy the structure and the model that we’ve developed over the past ten years. It started off in the East Bay of Northern California. Keiretsu Forum started in September 2000, and the tipping point was 150 members in our East Bay chapter. >>>

Seed Capital From Angel Investors: Randy Williams, Founder and CEO, Keiretsu Forum (Part 1)

By guest authors Irina Patterson and Candice Arnold

This is the fifth interview in our series on seed financing and angel investing. Our guest today is Randy Williams, founder and CEO of Keiretsu Forum, a growing angel network that currently has 850 investors in 19 chapters around the world. The forum has made 265 investments since its inception in 2000. >>>

Seed Capital From Angel Investors: Malvern D. Lusky, Individual Angel, Houston Angel Network (Part 5)

By guest authors Irina Patterson and Candice Arnold

Irina: What is your preferred investment type?

Malvern: I usually receive preferred stock but have also done straight stock or LLC deals.

Irina: Do you do debt financing? Convertible? Non-convertible? Terms?

Malvern: Most of my deals are preferred stock deals or a combination of preferred or common and convertible debt with warrants. I do not like straight financing.

Irina: What is your preferred exit strategy?

Malvern: My preferred exit strategy would be a straight cash sale at a high multiple. >>>

Seed Capital From Angel Investors: Malvern D. Lusky, Individual Angel, Houston Angel Network (Part 4)

By guest authors Irina Patterson and Candice Arnold

Irina: How many companies do you have under your belt that you’ve invested in?

Malvern: I’ve currently got seven.

Irina: That’s a pretty good number for an individual investor. They keep you busy, right?

Malvern: Right.

Irina: What is the typical valuation of a company you invest in?

Malvern: It’s $1 million to $7 million, but again, we sometimes get involved at slightly later stages, in conjunction with a VC, for example. >>>

Seed Capital From Angel Investors: Malvern D. Lusky, Individual Angel, Houston Angel Network (Part 3)

By guest authors Irina Patterson and Candice Arnold

Irina: How long does it take for a company to receive funding from your group?

Malvern: It usually takes from one to three months to get comfortable with the company and complete due diligence.

Irina: And the people are very important, right?

Malvern: Oh, absolutely. The people who are running the company are key to it because if there’s a problem with them, then the company will never make it, never get off the ground. If they’re not experts in their fields, then they need to understand that, and they need to get people who are; they need to be coachable. I’ve run across people before who thought knew everything and wouldn’t listen to anybody or thought they were giving up too much to their company for whatever reason. Those people never get anywhere. >>>

Seed Capital From Angel Investors: Malvern D. Lusky, Individual Angel, Houston Angel Network (Part 2)

By guest authors Irina Patterson and Candice Arnold

Irina: Approximately how many deals have you invested in so far?

Malvern: The total, including the ones I’ve exited, would probably be about 12, maybe more. But that includes deals that I’ve already exited for one reason or another . . . or they didn’t work.

Irina: Is this something that you enjoy doing?

Malvern: I very much enjoy doing this. I love it. >>>

Seed Capital From Angel Investors: Malvern D. Lusky, Individual Angel, Houston Angel Network (Part 1)

By guest authors Irina Patterson and Candice Arnold

This is the fourth interview in our series on seed financing and angel investing. Today we are talking to Malvern D. Lusky, CPA, and individual angel who is also a part of the Houston Angel Network.

Irina: Hi, Malvern. You’re an individual angel, right? And also associated with the Houston Angel Network (HAN)?

Malvern: That’s correct. I did a little bit on my own before joining the network, and I’ve been a member of that network for five years now.

The Houston Angel Network is a nonprofit organization that provides its members a forum in which to efficiently evaluate promising early-stage investment opportunities. Its membership consists of active and SEC-accredited angel investors who share the goal of making informed, collaborative investments in promising early stage Texas-based companies. HAN was founded in late 2001 and is the largest and most active angel network in Texas. Since inception, our members have invested more than $27 million in 54 deals. >>>