When Ozan Isinak was working in Istanbul, he found that investors were open to backing companies abroad, and local companies wanted international financiers. The problem was they didn’t know how to make connections. The world of business is increasingly global but that doesn’t mean making international friends is easy.
Mr. Isinak moved back to Toronto a year ago and noticed the same concerns. “There were a lot of companies that were concerned about the future. They were concerned about the fact that the U.S. was not doing well and that they had to diversify outside of North America but they didn’t know what to do. When you’re a Bombardier, that’s a different story; but when you’re a startup or a post startup, you’re constrained not just by capital but by other resources.”
This is where Keiretsu Forum comes into play. Since it was founded in 2000 in San Francisco, Keiretsu Forum members have invested $400-million from more than two dozen chapters around the world.
Last year alone, Keiretsu Forum members, a group of more than 1,000 of invitation-only angel investors, invested in 63 deals. Members provide between $250,000 and $2-million per chapter in early-stage funding for startups in technology, consumer products, healthcare/life sciences, real estate and other segments.
Five months ago, the group of venture capital funders opened an Istanbul chapter. Since then, two U.S. companies — Savara Pharmaceuticals and Anymeeting.com — were able to raise angel capital out of Istanbul.
“This is the same thing we want to do in Toronto,” Mr. Isinak said. “Keiretsu Forum really fills a void in Canada.”
Mr. Isinak is launching a Keiretsu Forum office in Toronto in March — the second Canadian chapter. A Vancouver office was established about five months ago.
“Keiretsu Forum has really started to spread out beyond the U.S. Before five years ago, angel investors tended to stay in their own backyard,” the 41-year-old president of Keiretsu Forum’s Toronto chapter said.
“With this new platform, you can have other members in other chapters do due diligence, track these companies and invest with them.”
His plan is to have about 75 to 100 Toronto-area members — investors who typically have a net worth of $1-million — invest in a project or startup, once a year.
“As an entrepreneur, you have to have the mentality to leave no stone unturned,” Costin Tuculescu, chief executive of Anymeeting.com, said. “You want to take every opportunity available to the company.”
The California-based company, which provides web-conferencing and webinar services, secured $250,000 in funding from members of the Istanbul chapter. “We got the deal done in two weeks. We did the pitch the second week of December and got it closed by the new year.”
Mr. Isinak said deal sizes are growing. “If an entrepreneur gets traction in one chapter, we’re able to shop that around, almost syndicate to the different chapters. Once the due diligence has been done, once the term sheets have been done from one chapter, we can take those companies to our Madrid chapter, to Paris, Barcelona, London. All of these brand new angels who have never seen these companies before, they’re able to piggyback on all the work that’s been done.”
About 20 companies apply to their local chapters every month. After a screening process, three to four are chosen to pitch their plan at a monthly forum meeting. The pitch is recorded and then shared with all of the chapters.
It costs $1,500 for a startup to do its pitch. “It’s a pay-to-present [model] at most chapters. A lot of entrepreneurs do get turned off by that,” Mr. Tuculescu said.
“But if you’ve been out there and you’ve been pitching for awhile and you’ve been able to raise financing from other investors, the cost is minimal and the exposure that it gives you is huge. You’re able to use the success you have in one group and leverage it in another group.”
“Angel organizations in Toronto or in Ontario are mostly focusing on local opportunities. But investment activities should go beyond Toronto,” said Leyuze Kozanoglu, Keiretsu Forum Toronto’s managing director.
She was the former business development manager at the Network of Angel Organizations — Ontario, which operated as a matchmaker between entrepreneurs and angel investors.
“It’s a global playground. We want to take these startup companies beyond Ontario,” she said.
By Melissa Leong Link to Source