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INVESTMENT CRITERIA

WHAT DO WE INVEST IN?

ARE WE YOUR BEST OPTION FOR FUNDING?

As the world’s largest and most active angel investment network Keiretsu Forum receives thousands of unsolicited applications every year.  Here in the Mid-Atlantic and South-East Regions we vetted more than 350 applications, invited 121 companies to screen with us, and brought just 44 companies to our Forum Meetings to present to our members.  If your company meets the criteria below, we encourage you to apply for funding, and we look forward to reviewing your application.  If your company does not yet meet these criteria please keep working on your growth and apply when your company is ready.

Management Team:  We are interested in companies that are driven by a dedicated, energetic, and talented team. We fully embrace the concept of “We Invest in Jockeys Not Horses” and look for a track record of successful performance.  We understand that part of your funding may be earmarked to complete your management team and we welcome this and will explore this in due diligence.
Investment Vehicle:  You are raising your round via Preferred Equity or SAFE2 (Post-money SAFE).  Companies actively engaged in a funding round who have already raised a substantial amount via another vehicle are welcome to apply with the understanding that you will need a comprehensive due diligence report from another recognized investment entity.  K4-MA will not undertake the execution of due diligence unless it includes our Term Sheet.
Legal Entity:  We embrace the opportunity to invest early in an LLC that is flexible and can convert to a C-Corp when the circumstances dictate the change.  Companies already structured as C-Corp entities are welcome to apply as well.
Valuation:  We are an early-stage investment group looking to do Series A and B rounds.  We have funded deals with valuations from $2m to $86m so long as the valuations were justified.  We recognize a number of valuation formulas such as the Berkus Method,  the Bill Payne Scorecard Method, The Risk Factor Summation Method, the VC “Required Return” Method, and the Lubert Money-in to Pre-Money Method.  We negotiate the valuation as part of our due diligence efforts and  welcome the opportunity to discuss your valuation as part of the K4 process.
Market:  We invest in companies capable of generating a significant ROI.  Your venture should be focused on a large market opportunity with sufficient untapped potential.  How will you tap this market?  What will be required to gain traction there and what will it take to reach the necessary market penetration?  Are you a disruptor to an existing market or will your venture create a brand new market?  Your business strategy must demonstrate a realistic model that captures a significant share of the target market.
Proof of Concept:  You should be beyond the design phase with product proof-of-concept or prototypes in play.  We recognize that pharma related entities take much longer to get into the market but early animal studies with positive data can serve here.  Beta customers, paid pilots, strong potential partnering agreements can also serve here.
IP:  What are your barriers to entry?  Do you have intellectual property that will protect your market and our investment?  You should be able to demonstrate key value propositions and competitive advantages.
Exit Strategy or Lifestyle Business:  Are you building a company that will be acquired in an M&A transaction?  Are you thinking IPO or will you become a very profitable lifestyle business that will return gobs of distributions?  Whatever the “exit” we are looking for strong returns and a model that will ideally provide an ROI in the 5-10X range.  Unlike other angel groups we welcome lifestyle business investments as long as they can return our 1X investment within 2 years and provide distributions into the future. 



 K4 MID-ATLANTIC APPLICATION    K4 SOUTH-EAST APPLICATION