Keiretsu brings 'swarm intelligence' to angel investing in India start-ups

Posted on September 20, 2015 by K4 Bangalore
Originally Published on The Hindu

We want to create a bridge, we want to tell entrepreneurs here, 'don't come to us in Silicon Valley, come here, enjoy the community here, fund is here. Because we are not going to fund you if you don't have the validation of your community.

In an interview to The Hindu, Keiretsu Chief Executive Randy Williams said the angel network will invest in start-ups in areas like financial technology, real estate, information technology and bottom of the pyramid. Edited excerpts:

What kind of investments are you going to make in India?

We don't move into a market as attractive as Bengaluru, unless we have the right team. We are fortunate to have a great team here and we will license our intellectual property and best practices. We have two chapters here in India. First with Chennai, we are fortunate to say that we already have seven fundings for the first year.

And we will be predicated on leadership between five to eight chapters in India in next 24 months. I am in no rush, just waiting for the local leadership to emerge and build and retain a healthy, strong and carefully crafted industry network. We invest in all asset classes from IT to real estate, to fashion to alcohol and wine. We have 765 fundings in last 15 years. What I would like to share with the Indian entrepreneur community is that we have a free due diligence book that is online, it tells them how we think and how to structure their company correctly.

What is so unique about Keiretsu, at a time when some of the top investors like Sequoia and Accel are already present in India?

We have two options for the members, one enjoy the 'swarm intelligence' of our global community to help you be a better investor. However, when you do invest, 100 percent of your dollars go to the entrepreneur, it doesn't flow back into Keiretsu Forum. We are a membership community helping each other, with careful, thoughtful and efficient ways to invest. The other option is that when members don't have time or when they want to have a large diverse portfolio, then we have a fund. We are very careful on membership, we have them vet us and understand the benefits of membership. However, we will vet them. It is swarm intelligence and mind share. You asked differentiators between Sequoia, Greylock, Kleiner (Perkins, Caufield and Byers) we are not a tier one VC, we are an angel network. Fortunately, we are the largest in the world; on a daily basis our members can see the deal flow from Singapore to Istanbul. When people say the best deal flow comes from Silicon Valley, I say no, the world is flat, there are great opportunities everywhere.

Is it important for start-ups to get funded in Silicon Valley?

We want to create a bridge, we want to tell entrepreneurs here, 'don't come to us in Silicon Valley, come here, enjoy the community here, fund is here. Because we are not going to fund you if you don't have the validation of your community. I am protecting two people, the entrepreneur and my members. We will continue funding these companies, if they meet the milestones, if they don't, game over!

Lot of internet start-ups are being tagged as unicorns and are being valued for billions of dollars? Are these valuations justified?

Yes and no. There is a paradigm shift today versus 10-15 years ago.

These companies have revenues, these companies have customers, recurring customers. And so even if their valuation comes down to earth, they will still make money.

So are we heading towards a technology bubble?

I don’t think it is a technology bubble. I believe in many of these companies. The difference now versus then is that they have real customers and they are paying.

What are the qualities that you observed among Indian entrepreneurs?

I say the world is flat; the great deals flow all throughout the world, especially in India. It is led by education, led by 'can do' spirit. We have pockets of 'can do' in America. Everywhere I go when I travel to India, it is like 'we can make it'. If you don't, you tried, then you go obviously to a multinational corporation.

So, I am very impressed with the people here and also in the Valley, where I live. When I see Indians in a company, it gives me great relief, because I know they are working hard, they care and they are smart.

September 20, 2015 00:21 IST | Peerzada Abrar