Keiretsu Forum Academy gives entrepreneurs an opportunity to present their ideas to investors in hopes of attracting startup dollars.
Unlike in the past, students graduating college today have no assurance of finding a job in their chosen field. Or, sometimes, successful professionals decide their heart isn’t in their current profession anymore and want to try something different. More than ever, individuals are asking themselves: Who am I? What do I want to bring to the world? For some, finding these answers brings an entrepreneurial spirit to the surface, and the process of starting their own company or business begins.
When you think of it, many things built by human beings began as a thought, became an outline or drawing, then evolved into a business plan that, hopefully, guided the product or service successfully to the marketplace. When we begin to explore products or businesses, it becomes obvious that, in many cases, a sole entrepreneur (or a group of them) came up with an idea and began to look for startup resources from investors. The first questions surfaced: How do I do it? Where do I find the resources? How do I get the money I need to do it? Enter the Keiretsu Forum Academy.
The Keiretsu Forum Academy is affiliated with the Keiretsu Forum, an investment group consisting solely of accredited investors who fund entrepreneurs. Founded in 2000 by Randy Williams, who lives in the East Bay, it has since grown to 26 chapters on three continents (United States, Europe and Asia) and has approximately 1,000 members worldwide. In Northern California, there are four chapters: Silicon Valley, San Francisco, East Bay and North Bay. Each chapter meets once per month and, at those meetings, entrepreneurs have an opportunity to present to all the investors in the audience in hopes of attracting startup dollars. The Keiretsu Forum Academy is a three-month course (one full day per month) that guides entrepreneurs in the direction they need to go to be successful.
In cooperation with Sonoma State University, North Bay iHub and Sonoma Mountain Business Cluster (as venue sponsors), Keiretsu Forum Academy recently began its first-ever Capital Access Series in the North Bay. The program is a direct result of Keiretsu Forum Academy’s participation in the 2012 North Bay Investor Summit (NBIS), which took place at Sonoma Raceway in October. The NBIS is the preeminent gathering of the North Bay’s angel and venture capital community. By bringing together investors with entrepreneurs looking for funding, this event offers a unique opportunity for entrepreneurs to gain experience pitching to investors, with real potential for getting funded. For investors, it’s a great venue to (possibly) discover the next big idea and get in on the ground floor.
According to Dave Mosby, executive director of the North Bay’s Keiretsu Forum Entrepreneur Academy, entrepreneurs often know how to develop products and ideas but might lack the knowledge of how to make effective presentations or business plans that will entice investment in their company. Mosby’s research found that only 10 percent of presentations given by entrepreneurs to investors will be successful. The primary goal of the Keiretsu program is to increase that figure to 20 to 30 percent.
Getting funded
Many entrepreneurs are unaware of what types of funding are available for startups (or the different ways to obtain funding). There are two common types of financing that a startup business—or a company that wants to expand—can begin to explore. The more familiar resource, but not always the best route, is through venture capitalists (VCs), who provide loans and equity investments. The loans are often expensive, with many VCs seeking as much as a 30 to 50 percent annual rate of return. Unlike banks and other lenders, VCs frequently take equity positions as well. That means you don’t have to pay out hard-to-get cash in the form of interest and principal installments. Instead, you give a portion of your or other owners’ interest in the company in exchange for the VC backing.
Another resource is an angel investor. Originally a term used to describe investors in Broadway shows, “angel” now refers to anyone who invests his or her money in an entrepreneurial company (unlike institutional VCs, who invest other people’s money). Angel investors expect a return on their investment better than they could do on the stock market. According to Allan Riding, a leading Canadian expert on angel investing and professor at Carleton University, “For every dollar an angel puts into a company, he or she would like to take seven dollars out, after taxes, in seven years.”
Angel investing has soared in recent years as a growing number of individuals seek better returns on their money than they can get from traditional investment vehicles. Contrary to popular belief, most angels aren’t millionaires. Typically, they earn between $60,000 and $100,000 per year—which means there are likely plenty of them right in our own backyard.
Businesses managed by owners and entrepreneurs—including startups, family firms or new business lines within established companies—demand a special kind of leadership. Programs such as the Keiretsu Forum Academy prepare individuals to become the leader their company needs—one with the vision and practical skills needed to seize opportunities, inspire the team, sharpen the strategy, overcome obstacles and drive the business to new levels of success. Mosby believes most entrepreneurs know about their product but don’t know how to think about their business as a product.
Keiretsu Forum Academy courses are taught by Keiretsu Forum members and industry experts, who deliver practical, relevant and timely business knowledge and practices. Topics include: CEO’s roles and responsibilities; understanding terms and conditions of a deal; financing options; accounting and financial projections; protecting intellectual property; sales and marketing; avoiding incorporation formation and compensation pitfalls; and valuations and exit strategies.
Participants are exposed to segments that specifically address giving presentations to investors. An example is the PerfectPitch series, an innovative approach to content, structure and preparation that equips participants to tell their best story. PerfectPitch offers a breakdown on what will resonate with investors and how much time to spend on each element, including the big idea (25 percent), what you need (5 percent), what you’ll do with it (10 percent), how much investors will get paid (10 percent), and how you’ll mitigate risk to returns (50 percent).
Creating entrepreneurs
As part of a continuing effort to serve as a catalyst for entrepreneurial programs in the North Bay, Sonoma State University’s School of Business and Economics has teamed up with the Keiretsu Forum to help bring the International Angel Investor Group’s Entrepreneurship Academy to the North Bay. The program is designed to teach participants how to strengthen their vision, prepare their business plan and gain skills that will help them attract investors’ interest.
According to Dr. William Silver, dean of business and economics at Sonoma State University, entrepreneurs aren’t born, they’re created through exposure to ideas and the understanding of what it takes to start a company. To that end, he’s always looking to create programs that inspire learning experiences for both undergraduate and graduate students at the university, and believes developing a sustainable business model for entrepreneurship in higher education will support students’ efforts and give them more hope for their future.
According to Silver, students have many creative visions for new products that could lead to a business venture or support a not-for-profit enterprise, and those ideas need to be nurtured. He’s also observed that students often need additional skills (above and beyond technical business skills) that will help bring their vision to reality. He encourages students to develop writing skills and understand the importance of effective public speaking when it comes to developing a business plan or making a presentation that wins over investors.
Along with supporting the Keiretsu program, Sonoma State University is expanding its curriculum to include topics that inspire and educate future entrepreneurs. The School of Business and Economics hired Mark Nelson, former president/COO of the Nelson,to be its Hugh Codding entrepreneur-in-residence. This position was made possible by an $180,000 donation by Codding Enterprises. In this position, Nelson will work with faculty, students and community organizations to develop and deliver on a number of entrepreneurial initiatives already underway. “I’m looking forward to making a difference in students’ lives, infusing hope and excitement and developing a new kind of thinking,” says Nelson.
Students need to understand the world’s changing demographics and know where to look for the dollars that will help start or enhance their vision along with keeping in touch with the many changes that might take place that could affect the success of one’s project or business. Another important concept to understand is the value of networking and building relations, which is key to the success of any new entrepreneur .
With ongoing changes in business, technology, politics and culture, it becomes even more important for students to be exposed to classes that address these issues and provide options for students. The Keiretsu Forum Academy, as well as Sonoma State University’s classes that inspire innovation, are sure to boost our economic health.
In another setting near the SSU campus, the Sonoma Mountain Business Cluster, the business incubation program that also serves as coordinator of the North Bay iHub, found a natural partner in the Keiretsu Forum Academy, says iHub manager Kari Danskin. The incubator had recently launched a new “Sprout” mentoring program, designed to prepare businesses to obtain investment capital. “It fits directly into the mission of getting our clients funded,” she says.
Preparing for success
“Once an entrepreneur always an entrepreneur,” says Ozan Eren Bilgen, who attended Keiretsu Forum Academy last fall. Bilgen came to the forum thinking he was ready to launch his software product only to discover he needed more information and instruction. According to Bilgen, most entrepreneurs know a lot about the technology aspect of their creation but have little knowledge of the business and financial components. After completing the Academy series, he recognized that he, too, needed to do more work in those areas.
“The forum helped me see more of what I needed to start my business. What I learned, I believe, saved me from failure.” Bilgen believes anyone who wants to start a company needs to be exposed to this information. Although he put his project on hold for now, he knows that, when he’s ready, he has more of a chance to succeed.
Gene Tange, CEO and founder of Pleasanton, Calif.-based PearlHPS Inc. (a cloud-enabled predictive analytics Saas software company that predicts business outcomes such as acquisitions, turnarounds or growth scenarios with great accuracy up to 12 months out), completed the Keiretsu Forum Academy in 2012. “If you’re a first-time entrepreneur or even if you’ve done it before, the Keiretsu Forum Academy is well worth the time and money,” he says.
Along with all the information and skills training, entrepreneurs who attend Keiretsu Forum Academy have an opportunity to explore potentials for both their vision and the visions of others. Damian Miller, VP of Net Flow Logic in Silicon Valley (cost-effective, scalable software solutions for real-time network management and enterprise security), who attended the academy in 2011, says, “The series provided a lifetime of startup experience in a condensed program that provides entrepreneurs with a solid foundation for success.”
Miller originally attended with a vision of starting his own company or joining another early stage venture in the network management and security space. He was able to meet like-minded people, including Sasha Velednitsky, co-founder of NetFlow Logic. It was a startup company at the time and, with his new knowledge, Miller joined the company and is enjoying the growth taking place.
“Keiretsu Forum Academy is the perfect program for any entrepreneur looking to meet visionaries who’ve used what they’ve learned to build great companies and share a passion for helping others do the same,” he concludes.
Continue learning
As an entrepreneur or a student, individual or company with an idea or a new direction of interest, the Keiretsu Forum Academy’s Capital Access Series helps prepare participants to resonate with investors, giving them a chance for financial support and access to expertise or other resources. Its promise to help people “Tell their best story ever and engage in confident discussions with investors of all types” delivers positive results. The next series will begin in July with one more to follow in November. You can visit www.k4academy.com for more information or to register.
“We don’t teach you how to run your business,” says Mosby. “We equip you to resonate with angel investors which improve your chances to accelerate your access to capital.”
