Rich people charging poor entrepreneurs to pitch them?
Jason Calacanis, CEO Mahalo.com, web entrepreneur and blogger, has taken on a personal mission to expose angel investor groups that charge startup entrepreneurs a fee to listen to their pitches.
It's a great rant of a post where Calacanis threatens, with the help of his supporters, to expose every single one of these groups. Calacanis explains:
Yes, you heard that correctly: the rich people (angels) are charging the poor people (startup entrepreneurs desperate for cash to fuel their dreams) to hear their pitch. No, I’m not kidding. This is actually happening — and it’s widespread.Last week, a number of the TechCrunch50 companies informed me about firms calling them to present at their “Angel forums” — only to discover that they would face fees ranging from $1,000 to $6,000 for a
10-15 minute pitch slot. After additionally investigation by the Jason Nation (the top 10% of the maniacs who follow me on Twitter), I was sent details of one epic bastard that wanted $10-$25,000, plus a couple of percentage points of the value of the deal (you’ll find out who later in this email).When I heard this, my blood started to boil immediately. So, I did what any maniacal, self-absorbed CEO from Brooklyn would do: I started a jihad against this dispicable form of payola and the people doing it. It’s on people … it’s on like a Donkey Kong.
Alright startup folks -- has anyone around here ever felt forced to pony up some cash for investors to listen to your pitch? What do you think of this as a practice -- smarmy or just the way the world is?
Comments
Jason Calacanis is right on.
If a guy has to pay for sex for example, it's probably because he's really desperate and can't get it anywhere else. It's also probably not going to amount to much afterwards either.
Likewise, if a startup has to pay to pitch investors, it's probably because they're really desperate and can't get a meeting anywhere else. It's also probably not going to amount to much afterwards either.
P.S. Jason's show, www.thisweekinstartups.com, is amazing, and a must-watch for aspiring entrepreneurs.
Thanks for the link, Paul. -gus
Posted by: Paul Capestany | October 22, 2009 12:05 PM
TEDCO hosts angel events for its portfolio and affiliated companies. Personal invites are sent to known angels and VCs. The events are staged in a “speed pitching format”. Ten companies pitch for ten minutes each to the angels and VCs, and a reception is held after so that the investors and companies can interact and get to know one another.
No fees are charged to either the angels or the companies; however, TEDCO invests its time and energy along with the presenting companies to uncover the pitch that presents a viable business opportunity to the investors. The law firm of Arent Fox was a co-sponsor of our last event picking up some of the expense of the reception.
For more information concerning TEDCO see www.marylandtedco.org
James A. Poulos, III
TEDCO
Vice President of Technology Transfer and Commercialization
Thanks, James! -gs
Posted by: James A. Poulos, III | October 28, 2009 3:12 PM