
Keiretsu Forum To Drop Fees For Early-Stage Startups - jasonlbaptiste
http://www.pehub.com/53299/keiretsu-forum-to-drop-fees-for-early-stage-startups/
======
jacquesm
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-m...](http://calacanis.com/2009/10/05/jason-jihad-keiretsu-forum-must-
be-stopped/)

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.

~~~
fnid
I googled it and i didn't see calacanis's post anywhere in the first ten on
any major search engine.

~~~
paulbaumgart
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
It might have to do with being logged in to a google account too.

------
anamax
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?

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

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."

------
gbookman
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.

------
jolie
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.

------
mhansen
> Williams said the change is not a response to the recent

> attacks on the fees launched by investor Jason Calacanis

Sure!

------
lupin_sansei
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.

~~~
jacquesm
It's ok if you can't see the problem, really.

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.

~~~
kgrin
Wrong Jason... Calacanis is Mahalo & others... 37signals is Jason Fried.
(Minor, of course, though I suppose not to the Jasons!)

~~~
jacquesm
Right Jason, wrong company you mean. That's what you get for posting at 5:30
in the morning... apologies to _both_ Jasons ;)

