“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.”
– Jason Calacanis, October 2009
Jason Calacanis published an infamous rant (his term) in 2009 stating that startups shouldn’t have to pay to pitch to angel investors, and calling out some of the angel groups that were operating this way. This generated a lot of debate, including support from the likes of Fred Wilson (the acclaimed VC), and defense from others such as Chris Padfield (part of something called the Angels Den in the UK, one of the groups Jason called out).
Recently I have been involved in a couple of situations where the startups I have been working with have considered their pitch approach. It was doing some quick research again one night that reminded me of Jason’s vitriolic and passionate argument, and led me to wonder – what’s changed?
To address this, I tried to find out if the organizations highlighted by Jason were still around, and if they were still charging to pitch. This is what I discovered:
- Keiretsu Forum – while their website obfuscates the fact, there is indeed a $6,000 fee if your are “selected” to pitch. I had to get this information by emailing their contact address.
- Maverick Angels – still $495, packaged as a workshop, which must be taken before you get the chance to pitch.
- PrivateEquityForums.com – this website has the look and feel of the 90s, which alone should be a huge warning flag. I couldn’t find their price to pitch, so I emailed the organizer who wrote back to confirm that there is a fee, but that he wanted “no e-mails with questions please”. Can you hear the alarm bell going off in my head?
- Tech Super Club – now defunct?
- Angels Den (UK) – They offer a lot of packages for £799, + a 5% success fee.
- USAngelinvestors.com – did not respond to email.
- Angel Venture Forum – $1500 per finalist, with verbiage talking about how this doesn’t come close to covering costs.
- Central Texas Angels Network – They charge $250 to submit an application, and that’s before you even get the chance to pitch. Wow. They did not respond to my email follow-up.
Many of the above will defend their decision to charge on the basis that there are costs involved in running and hosting the pitch event; that charging a fee acts as an initial quality screen; and that “hours” are spent pouring over pitch decks and providing feedback. All of this may be true, in which case I would argue that this is how the “service” should be structured and sold, rather than orienting around the pitch event itself. You are paying for advice, not to pitch.
Many entrepreneurs will also consider options such as The LAUNCH Festival or TechCrunch Disrupt, though getting in is very competitive. However, even for these events that don’t charge to pitch, you need to consider how much time and energy you will need to invest in the process, and weigh this against the likely outcomes. Anecdotal evidence I have collected is mixed, but be wary of believing that getting on stage and launching/pitching guarantees anything (though at least your dev team will have a concrete delivery date to hit!).
As an aside, I recently went through the very detailed preparation and follow-up work that was required to launch on stage at DEMO Mobile in San Francisco. Email me for coffee if you want to hear about the experience.
Overall, when thinking about if you should pay to pitch, my view is — no. It makes little sense as an entrepreneur…if you have a great idea then through your own sweat and perseverance you should be able to get access to Angels and other investors (and don’t underestimate AngelList as a tool). Getting a meeting isn’t the biggest challenge; walking out of the room with a signed check is much harder!