Seed Capital From Angel Investors: M. Todd Dean, Keiretsu Forum, Northwest Chapter President (Part 2)

By guest authors Irina Patterson and Candice Arnold

[Todd continues his discussion of why he thinks the group’s model works.]

Todd: The third thing is the amount of resources that our members are able to provide to the companies. Anybody can write a check or invest in a company and that’s one thing, but when you’re working with startup companies, they’re like kids.

They have all different personalities, and they make good choices and bad choices, and they need a lot of help and guidance. With that, because of who our members are – ex-CEOs, ex-CFOs, ex-serial entrepreneurs – we understand what these companies are going through. Oftentimes they’ll need an introduction to Microsoft, or they’ll need a VP of business development or a board member or some help on their financials.

There’s a tremendous amount of support and help that these companies need. And because of the number of investors that we have in the Northwest, we’re able to provide a significant amount of resources, and the same thing with the Bay Area.

Irina: So, members from different regions can go to each other for advice or help with an investment, right?

Todd: Exactly.

Irina: Do you primarily look at deals in your specific region?

Todd: Yes. We look at deals within our region. We look at deals within Seattle; we look at companies within the Northwest. It could be Boise [in Washington state], Oregon . . . it could be British Columbia, Canada.

We look at companies from the Northwest, but we also look at companies from across the country. We’ve invested in a company out of New York, we’ve invested in a company in Boston, we just looked at one out in Nashville. So, we’re very agnostic as to where the companies are from. But the majority of them are from the Northwest or California.

Irina: The local companies get to present live for your group at your monthly meetings, right?

Todd: That’s correct. The meetings are actually all run the same way. So, similar to McDonald’s, you have the same experience in Seattle as you would in the Bay Area. There’s a standard format. Randy Williams and I are probably the closest as far as how we run our meetings.

Irina: Where do you think you get your best deal flow from?

Todd: That’s a great question, Irina. Over 90% of the companies come from our investor members. Typically our members would’ve either invested in a company or they looked at the company, or they spent time with the CEO. And we’re only one piece of the pie. Keiretsu Forum is really kind of before the VCs and after the angel groups, the angel networks. So, we’re in our own sweet spot.

Irina: If an entrepreneur wants financing from your forum, where should he or she go? What should his or her first point of contact should be?

Todd: That’s the beauty of Keiretsu Forum. It’s a member-run organization.  It wouldn’t matter if it was my neighbor or my brother or if it was one of the members’ relatives or a stranger. Every company goes through the exact same process. They would apply online at Keiretsu Forum, fill out the fact sheet, and  go through the respective regions.

If it’s a Northwest company, it’s going to go through the Northwest region first. If it’s in the Bay Area company, it’s going to go through the Bay Area. The companies get vetted through their respective regions, and they get filtered by those regional investors.

Those investors decide whether to do due diligence and invest in those companies. That’s really where we find out where the critical mass is as far as interest among members. And then we syndicate those deals among regions.

This segment is part 2 in the series : Seed Capital From Angel Investors: M. Todd Dean, Keiretsu Forum, Northwest Chapter President
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