Investing Cowboys

At my hotel I got a message to meet with some Itochu personnel in an investment division. This interested me; was it a group who might come into a deal when KV balked? More interestingly, would they back me in an independent investing venture?

I asked my KV friends about IFC — Itochu Finance Corporation. They didn’t have a positive opinion, regarding them as amateurs who didn’t understand technology businesses. Still, I took the meeting.

Sakurai-san introduced himself and his associate, Sano-san. “We want to be included in U.S. investments. Can you help us do this?”

Right to the point, I surmised. “What kind of investments are you looking for? And what do you bring to the companies? Anything besides money?”

“We have Itochu’s name, but we want to make investments directly.”

I was confused by this group’s presence. Why not tag along with other departments in Itochu? “Not with CTC? Not with other departments?” I pressed.

“No, we are a small group — independent. We just want to join in pre-IPO deals. This is what we are looking for.”

I quickly processed the situation. These fellows had eagerness for short-term investing without the requisite knowledge for the long-term. They appeared to have no strategy other than chasing hot leads. These were not investors placing their bets on a targeted technology, nor adding value from Itochu affiliates. I was puzzled as to how they even got the authority to use corporate funds. This was just greed.

“How much are you looking to invest in companies?” I asked Sakurai-san.

“We wish to invest around $50,000 in each company; maybe $100,000 over several financings.” I would expect this from a wealthy individual, not a VC or even an LP participating in a fund. I was wasting my time with these guys. Furthermore, I risked alienating my own connections at KV and CTC if I tried to accommodate them.

Another quagmire, from which I was going to exit quickly. I gave them a cordial goodbye and left well before the hour was up. As a VC once told me, it’s important to get to an answer without wasting a lot of time.