Keiretsu Forum To Drop Fees For Early-Stage Startups
pehub.com
pehub.com
http://calacanis.com/2009/10/05/jason-jihad-keiretsu-forum-m...
And that link is rising rapidly. If Jason Calacanis keeps this up he'll be running them out of town yet. Pretty amazing really, considering the relative sizes of the parties.
In my case, I see Calacanis's post at #10.
What kind of biz do they actually fund, how much do they actually invest, and what happens to the folks that they have funded (or even advised) in the past?
Here are some key quotes but the whole set of his comments are worth reading.
"While I don’t fully understand the inner workings of Keiretsu, what I think I have learned thus far is 40%- 50% (huge numbers) of the startups that pay significant fees to Keiretsu get no funding."
"In fact, I believe that Keiretsu’s incentives would be more properly aligned if they did have a stake in the outcome of the startups they represent. As it is, they have no incentive to ensure that every startup they put in front of their cadre of investors has a better chance than a coin flip of getting funded. [..] For example, Keiretsu could only take fees from startups who actually get funding, i.e., a success fee."
"I would support a pay for performance model where the angel aggregator group only gets paid if they are successful in making a good match between their investors and the companies they charge fees to--no funding, no fees. Charging, say, a 2% - 4% success fee is utterly reasonable and in this scenario, the angel group has it’s incentives aligned with the startups and the investors, i.e., to make successful matches between entrepreneurs and investors."
I know lots of people who've applied to Keiretsu in Seattle. You have to really know your stuff and have significant traction for them to even consider funding you.
> attacks on the fees launched by investor Jason Calacanis
Sure!
Nobody is making startups apply Keiretsu, and if Y-Combinator and Jason won't invest in your startup what's wrong with deciding to pay to let Keiretsu consider funding you? Better a startup pays some money and has a least one company consider their application than nobody does.
I haven't seen them publish any hard statistics, so how can a group know if it's just them that got rejected for funding, or if it's pretty much everyone who applies?
Investors, on the other hand, play the game more regularly. It's impossible to keep the information from them long term. If they had to pay to come, they would need to be finding good investments. Startups don't have this feedback, at least not without things like public complaints.
There are plenty of people that play the lottery, and there are plenty of people that don't. Some see trouble and loss where others see a chance.
So, feel free to approach Keiretsu with your idea now, since they've stopped charging, you really can't lose.
Or do you think that maybe since they did this in the past they might have a little ethical problem somewhere ?
If Jason Calacanis fails with 37 Signals and all he does is keep the VC world on their toes he's got my vote.
It's like banking, if banks started charging you a $500 application fee for a $10000 loan, how would you feel ? What if they charged you the fee anyway even if they declined you ?
Why would they ever grant a loan then, after all there is more profit in getting people to apply endlessly and every now and the at random approve a loan to keep them hopeful.
Because once people realised that no more loans were being given out they would stop applying to banks that didn't give out loans. The same thing will happen to Keiretsu if they never funded anyone.