Fund: Keiretsu Forum
Posted by Anonymous on 2009-09-29
My company had a bad experience with Keiretsu Bay Area and Pacific Northwest. I would advise to spend your money on the fundraising efforts elsewhere.
In my opinion, the more experienced and respectable K4 members/investors tend to want to take a back seat throughout the due diligence process at K4. The ones who want to do due diligence have their own agenda. They mainly want to "schmooze" with other members and gain visibility. They often do not understand that their decision to lead a part of the due diligence process has a tremendous impact on the ability of the company to raise money through K4 and/or they treat the candidate companies as the means to their own goals (networking, etc.) Before you announce to the interested K4 members that a certain member will lead any part of your due diligence, make sure that the lead has started companies in the past and/or realizes how difficult fundraising can be for a company. Also, look for people who are realistic and understand that there is no perfect companies. If your DD lead freaks out over the smallest issue then your chances of raising money through K4 are close to nill.
Additionally, you need to realize that, to the K4 staff, your company is not important after you paid the fee to present. Yet the members are very important to the staff, because members are the source of recurring revenue. As the result, you will get treated as an annoyance by the staff. K4 staff is mostly composed of interns, who are not compensated, hence, do not expect neither knowledge nor experience from the staff. For instance, the new Entrepreneurial Director of K4 Bay Area is an inexperienced recent college grad.
Furthermore, as a company you get screened a few times before presenting. Members sign a paper saying that they are accredited investors, yet no one checks their status. K4 staff will not disclose whether a member ever invested before. Hence, members are not screened at all. This opens the door to people with agendas other than investing. These people to gain access to the companys' confidential info. I had to deal with a member who joined K4 to learn enough about startups to either start his own or to join a VC later. Moreover, you will be pursued and distracted by "members" who are trying to sell you their service and will sign up for due diligence to get more opportunities to market to you.
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