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Aug 07

Mind Share and more: What happens at a Keiretsu meeting

Welcome to Keiretsu. If you’ve never been to a meeting, here’s an insider’s view.

The meeting starts with greetings, informal meetings and light breakfast items.

Keiretsu is not a networking group. It is an event management group, a facilitation meeting.

It is the largest angel investment organization in North America.

At the Philadelphia location, Howard Lubert is the area president and serves as the facilitator. He gives a brief introduction for first-time visitors and reminders for long-time visitors of the purpose and scope of the meeting. He handles announcements and manages the flow of conversation in the room, making sure everyone has a voice and questions are thoroughly addressed.

At every meeting, four previously vetted entrepreneurs each have 12 minutes to deliver a powerpoint presentation and a pitch. That 12 minutes could be worth millions of dollars.

“There’s one way to get in as a presenter. Jump through all the hoops in multiple stages,” Howard said.

About 30 people attend the meeting. Each non-presenter gets a gold sheet they are required to fill out. It is in many ways the proverbial golden ticket.

That becomes the single most important reason many people travel for this meeting.

The gold sheet includes feedback and commentary from every single person in the room, including opportunities to check a box for follow-up. Include any free resource you’d like to refer to these companies. Remarks in the comments section will be transcribed and delivered to each entrepreneur.

“Feedback is worth almost as much as the investment dollars,” Howard said.  There are frequent reminders to fill it out either in writing or online as the day progresses. That gold sheet will determine whether someone moves forward in the process to the due diligence stage. Three pieces need to come together for a successful partnership between entrepreneur and investor: term sheet, ppm and full due diligence report. Once these three are acquired it “pretty much says I’m investment worthy,” Howard said.

People who present at other Keiretsu chapters have the opportunity to present here in the four chapters of the mid-Atlantic region as well as around the country.

Each person in the room has the opportunity to make an introduction, but not a solicitation. People who make this happen. Each has an important role:

Accredited investors – If there weren’t people showing up each month with checkbooks in pocket, there would be no Keiretsu.

Presenters/speakers – 44 a year. 4 a month. Best get invited to the expo.

Partners – College/university any organization that has had hand in developing entrepreneurial ecosystem in the area.

After each presentation, there is 8 minutes of rapid fire questioning. Howard picks out the next question based on seeing hands raised, and he calls out when it’s time for the last question.

That’s a 12-minute presentation, 8 minutes of questions and it equals 20 minutes focused on the presenter. The presenter then leaves the room and the attendees interact in what’s called “Mind Share.” First, give a compliment. Then a critique. With the presenter out of the room, there are still more compliments than critiques but the exchanges are honest and insightful. The kinds of comments: the presenter was prepared, polished, kind of investment we’ve done before, huge market, strong benefits, good formula for funding to leverage. Also: More substantiation of the numbers, what’s their personal investment in this, what’s competition and how will you do it faster?

 

After a few minutes of discussion, Howard announces they have to pick 1 last question. Someone in the room immediately selects someone else’s question as the one question they will ask the presenter.

Howard instructs the person who asked it to write it down and be prepared to ask it at the end.

All four presenters are back in the room at the end and they each have the opportunity to answer the one last question. After that, the meeting starts to wrap up, there’s a lunch and learn and opportunities to talk one-on-one with each presenter.

The slogan is “Great Association with Quality Deal Flow.”

That’s what the meeting is: a great association with quality flow.

 

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