4 ms·

Keiretsu Forum To Drop Fees For Early-Stage Startups

19 points by jasonlbaptiste 17y ago

jacquesm 17y ago
By now they might as well change their name, they've had so much bad press that if you google keiretsu forum you get this on page 1 now: http://calacanis.com/2009/10/05/jason-jihad-keiretsu-forum-must-be-stopped/ 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.
- netsp 17y ago
  Reputation is a lot harder to build then it is to kill.
  - jacquesm 17y ago
    Especially when the other party helps you.
    - netsp 17y ago
      Other parties have more of an impact on your reputation either way.
- fnid 17y ago
  I googled it and i didn't see calacanis's post anywhere in the first ten on any major search engine.
  - paulbaumgart 17y ago
    I've noticed recently that Google re-orders results for different people. Not sure if it's Google account, cookie, or IP-address-based (I'm guessing the first two). In my case, I see Calacanis's post at #10.
    - jacquesm 17y ago
      It might have to do with being logged in to a google account too.
  - jacquesm 17y ago
    here is what I get: http://ww.com/calacanis.png http://ww.com/calacanis.png
lupin_sansei 17y ago
I'll get voted down on this for sure, but I can't see the problem. 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.
- netsp 17y ago
  The problem is that it creates a problematic incentive structure.
  - lupin_sansei 17y ago
    You mean Keiretsu has an incentive to listen to many applications but to maybe fund few? Startups also have an incentive to only apply to places that they think they have a chance at getting funding from (especially if they have to pay). If Keiretsu don't fund very many startups word will get out and startups will stop applying.
    - paulbaumgart 17y ago
      How would "word get out"? Vague insinuations? 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?
      - netsp 17y ago
        Word is getting out. This forum, that blog. That is word getting out. I'm sure fewer startups are applying.
    - netsp 17y ago
      I mean Keiretsu has an incentive to listen to as many applications as possible. Your right about startups having incentives too. However, Keiretsu have all the information. hey have an incentive to keep it that way. 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.
gbookman 17y ago
The reason they're dropping the fee so quickly is because they don't fund or even listen to many early-stage startups. 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.
skmurphy 17y ago
Bob Crimmins left some very insightful comments on a Keiretsu Forum member's website at http://startuptrek.net/sequoia-backed-blogger-jason-calacanis-launches-jihad-against-keiretsu-forum/#comment-858 http://startuptrek.net/sequoia-backed-blogger-jason-calacani... 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."
- deleted 17y ago
  [deleted]
anamax 17y ago
I keep hearing about Keiretsu's process, but I've yet to hear anything about its results. 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?
mhansen 17y ago
> Williams said the change is not a response to the recent > attacks on the fees launched by investor Jason Calacanis Sure!
jolie 17y ago
About damn time. I wrote a post about these guys and their ilk on ReadWriteWeb a couple weeks ago, and I really can't condone their practice of charging startups to pitch, ESPECIALLY for very early-stage companies.

By now they might as well change their name, they've had so much bad press that if you google keiretsu forum you get this on page 1 now: http://calacanis.com/2009/10/05/jason-jihad-keiretsu-forum-must-be-stopped/ 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.

netsp 17y ago
Reputation is a lot harder to build then it is to kill.
- jacquesm 17y ago
  Especially when the other party helps you.
  - netsp 17y ago
    Other parties have more of an impact on your reputation either way.
fnid 17y ago
I googled it and i didn't see calacanis's post anywhere in the first ten on any major search engine.
- paulbaumgart 17y ago
  I've noticed recently that Google re-orders results for different people. Not sure if it's Google account, cookie, or IP-address-based (I'm guessing the first two). In my case, I see Calacanis's post at #10.
  - jacquesm 17y ago
    It might have to do with being logged in to a google account too.
- jacquesm 17y ago
  here is what I get: http://ww.com/calacanis.png http://ww.com/calacanis.png

lupin_sansei 17y ago

I'll get voted down on this for sure, but I can't see the problem. 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.

netsp 17y ago
The problem is that it creates a problematic incentive structure.
- lupin_sansei 17y ago
  You mean Keiretsu has an incentive to listen to many applications but to maybe fund few? Startups also have an incentive to only apply to places that they think they have a chance at getting funding from (especially if they have to pay). If Keiretsu don't fund very many startups word will get out and startups will stop applying.
  - paulbaumgart 17y ago
    How would "word get out"? Vague insinuations? 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?
    - netsp 17y ago
      Word is getting out. This forum, that blog. That is word getting out. I'm sure fewer startups are applying.
  - netsp 17y ago
    I mean Keiretsu has an incentive to listen to as many applications as possible. Your right about startups having incentives too. However, Keiretsu have all the information. hey have an incentive to keep it that way. 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.

gbookman 17y ago

The reason they're dropping the fee so quickly is because they don't fund or even listen to many early-stage startups. 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.

skmurphy 17y ago

Bob Crimmins left some very insightful comments on a Keiretsu Forum member's website at http://startuptrek.net/sequoia-backed-blogger-jason-calacanis-launches-jihad-against-keiretsu-forum/#comment-858 http://startuptrek.net/sequoia-backed-blogger-jason-calacani... 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."

deleted 17y ago
[deleted]

anamax 17y ago

I keep hearing about Keiretsu's process, but I've yet to hear anything about its results. 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?

mhansen 17y ago

> Williams said the change is not a response to the recent > attacks on the fees launched by investor Jason Calacanis Sure!

jolie 17y ago

About damn time. I wrote a post about these guys and their ilk on ReadWriteWeb a couple weeks ago, and I really can't condone their practice of charging startups to pitch, ESPECIALLY for very early-stage companies.