NJ Serial Entrepreneur and angel investor Harvey Homan leads the effort here
On Monday, Keiretsu Forum announced the launch of a new chapter in Princeton. The chapter will be part of Keiretsu’s Mid-Atlantic Region.
Keiretsu Forum is the world’s largest and most active investment community of early-stage accredited angel investors, with 53 chapters across three continents, including the newly minted North Jersey Chapter, according to Keiretsu Mid-Atlantic Region cofounder Howard Lubert. The angel group will focus on series A rounds.
The investors are willing to consider companies in any industry, but they expect their deals in New Jersey to be primarily with tech and life-science companies since these are dominant in the state.
The new chapter is being led by Harvey Homan, a serial entrepreneur and experienced angel investor, and there are currently six accredited angel investor members. The chapter has been running virtually for the last nine months, Homan stated. He added that he will be seriously trying to grow the chapter and add angel investors to their ranks.
Princeton The Perfect Location
We asked Lubert and Homan why now is the time to enter New Jersey.
Lubert explained that the Keiretsu Forum had attempted to come into New Jersey three years ago, and had planned to set up at a facility associated with Princeton University. The logistics didn’t work out, but the interest remained, and when Homan expressed his desire to begin a chapter in Princeton, the organization jumped at the chance.
“Having a location in the Princeton area is just perfect logistically, to be able to make a stop all the way down to Philadelphia, to attract more members and more investment opportunities,” Lubert said.
Homan noted that one of his longtime connections, Steve Cohen, the managing partner of Morgan, Lewis, & Bockius’s Princeton office, enthusiastically agreed to become Keiretsu’s host sponsor. “So, when we go live again, we’ll be working out of Morgan Lewis’s Princeton offices.”
Homan became associated with Keiretsu in February of 2020. “I’ve been involved in the New Jersey’s startup ecosystem for the last 20 years, and started several companies in New Jersey,” he said, adding that over the years, he has worked with the former New Jersey Commission on Science and Technology (now the New Jersey Commission on Science, Innovation and Technology) and has received funding from the New Jersey Economic Development Authority (NJEDA). He “built up companies that way, but always saw a huge need for additional funding sources in New Jersey.”
After Homan sold his last company in 2017, he began angel investing, and spent a year and a half investing with Jumpstart New Jersey Angel Network. “One of the members there introduced me to Keiretsu. I started attending meetings and was enthused about the quality of the deal flow that I was seeing. The companies were great. The amount of exchange between investors in the meetings was tremendous. And it was run really, really well.”
He added that Keiretsu is focused on later-stage, series A startup funding rounds, which personally attracted him in terms of his investments. Series A rounds are typically undertaken after a startup has outgrown seed financing and now needs significant capital.
Advantages For Startups
An advantage for startups seeking funding from Keiretsu is that, while the Mid-Atlantic Region consists of five chapters, they all function as a single regional unit, Lubert noted. “So, when we invite four companies to come to present to us, they present to all of our members at all of our chapters.”
Also, companies applying to Keiretsu are impressed with the amount of due diligence the fund performs. Even if Keiretsu chooses to pass on an investment, the startup takes home a comprehensive document that can become a blueprint for improving its performance and becoming attractive to other investors.
Lubert noted that the diligence team works very closely with companies, helping them to present their best case. “We get to know the company, the CEO and the CTO very well through that due diligence process, and they get to know us. Over a 10-year period, we’ve probably executed somewhere north of 250 due diligence projects. And in that 10-year period … we’ve never once had to go outside of Keiretsu members here in North America to find the necessary subject matter experts who are also active angel investors to participate in those due diligence teams,” he told us.
“The beauty of having 33 chapters and 2,000 members is that we’ve got SMEs [subject matter experts] everywhere in every space. And that helps our members create fantastic due diligence reports that help each other come together when it comes time to write the checks.”
Keiretsu’s large number of accredited angel investor members also provides “a great opportunity for a company to come into Keiretsu through the chapter in New Jersey, but then have access to a global network. They’ll be able to achieve funding in the multimillion-dollar range.”
The Series A Sweet Spot
The most recent angel group to come into New Jersey was Golden Seeds (New York), which launched its New Jersey chapter in February of 2020, with the help of the NJEDA and New Jersey first lady Tammy Murphy. Golden Seeds is a nationwide angel network dedicated to investing in female-led startup companies. The organization has more than 300 members, including accredited investors from a diverse range of locations, sectors and backgrounds.
Analyzing the angel funding ecosystem in New Jersey, Homan pointed out that angels like Mario Casabona, of TechLaunch (Kinnelon), write checks at a very early stage in a company’s growth, and Jumpstart comes in at the stage right after that.
“I was talking to Rod Priestley at Princeton University. They fund startups through the Princeton alumni network, but they’ve lost those startups to other states when the companies go for the next level of funding, a late-seed stage or Series A round. That’s the sweet spot for Keiretsu. So, I think this solves a real need.”
Keiretsu attracts a “tremendous” amount of diversification in the startups it attracts, he added. “We attract companies from numerous industry silos, from tech and life science, which are our biggest sectors, but on to real estate, and virtually every other industry. We draw from all geographies. And we focus on diversity of leadership teams, with great interest in female-lead and black-lead companies.”
The angels are now meeting virtually, with all of the Mid-Atlantic chapters working with the South-East Region chapters to screen companies. About a dozen companies present at each meeting. The angels then choose four companies to present in depth at a forum meeting in which investment decisions are made.
Homan added that he sees the North Jersey Chapter becoming an essential part of the tech community in New Jersey. It will work closely with Princeton and other universities in the state, and with the NJEDA, TechUnited:NJ (New Brunswick) and BioNJ (Trenton). “We want to become a really, really vibrant part of this ecosystem — and a place where companies can come and learn, ask questions and be at a central point [where] they can get mentoring and get support. And I know that, from my experience with Keiretsu’s members, they are enthusiastic to do that.”