Keiretsu Forum doesn’t have the name recognition of Y Combinator or Andreessen Horowitz. But by some measures, the lesser-known organization has become the world’s most active startup investing group. Keiretsu said it invested in 207 startups last year, which is more than any angel investor group or venture capital firm, according to PitchBook. Its growth has been fueled by a business model that has attracted controversy: asking startups to pay thousands of dollars to pitch its members.
Keiretsu, which invested $76 million in startups last year, is the most visible example of what founders and investors say is an increase in startups being asked for upfront payments to meet with investors. Some founders say the system, sometimes called “pay-to-pitch,” helped them meet investors and get their companies off the ground. But critics of the practice say it takes advantage of inexperienced founders who already are struggling financially.