Angels Who Charge Entrepreneurs to Pitch: the Debate Heats Up
It’s an Xconomy holiday today, but I couldn’t resist a quick pointer post to an argument heating up across the Web—one that is related to a story we ran here last week about a new Cambridge, MA-based group, Revolutionary Angels, which announced its plans to hold a quarterly business plan competition.
Revolutionary Angels drew fire from a few readers about its plan to charge would-be startups $4,995 to pitch at the competition, in which they could win up to $250,000. What’s been happening over the weekend is that (on Friday night, as far as I can determine) Mahalo founder and Internet commentator Jason Calacanis posted his own long diatribe against the practice of angels charging entrepreneurs to pitch. He didn’t name Revolutionary Angels, but did name five others.
Calacanis’s post is called: “What startups shouldn’t have to pay to pitch angel investors.” And it carries the disclaimer: “written with boiling blood.”
I’ll say. Here are a few of Calacanis’ choice words:
“I’ve been in the startup scene since 1994 and in those 15 years I’ve met, interviewed — and in some cases, pitched — the most powerful investors in technology. None of them have ever charged me a dime for doing so. Why? BECAUSE THEY ARE RICH!
It’s low-class, inappropriate and predatory for a rich person to ask an entrepreneur to PAY THEM for 15 minutes of their time. “
This morning, PE Hub’s Deborah Gage also pointed to Calacanis’ post and provided responses from some of the groups he mentioned. Her summary of the responses:
“Events are not free, according to privateequityforums.com and the Tech Supper Club, and EVERYBODY charges, including TechCrunch — you can charge entrepreneurs, investors or sponsors, or some combination of the three.
Also, they argue, they’re selling a service because they get entrepreneurs in front of serious, qualified investors, which is hard for a lone entrepreneur to do — there are costs in marketing a startup no matter how an entrepreneur chooses to spend the money.”
Check out the arguments and see what you think. Or maybe you have something better to do on a holiday.