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49 Comments
- socivitus, on 10/10/2009, -7/+37Pretty sleazy way to make money off people who are looking for help. No self-respecting person would run an organization that rips people off and takes advantage in such a way. Hopefully Jason can cause enough noise to this issue that their businesses die out.
- Thistlejack, on 10/10/2009, -11/+38If you have to pay to pitch an angel, you're not well connected enough to be a successful entrepreneur. Entrepreneurship is about connections with people, not finding the next big idea. Someone with a mediocre idea and a great network with always beat out someone with a great idea and a mediocre network.
- Gndoab, on 10/11/2009, -5/+17then find other people to pitch to. problem solved.
- ControversedDig, on 10/11/2009, -4/+16Light grey on a white background? Is this guy ***** dumb or what?
Who do he thinks he is anyway? GTFO. - captaincurk, on 10/11/2009, -0/+10I have recently founded a company myself and must say this practice is not uncommon. While I did not know about the pay-to-pitch scam, there are loads of companies charging imaginary fees for BS such as online marketing to "jump-start startups" or "all the required IT infrastructure". Hopefully this article will make the frontpage and raise the awareness about this problem in the community.
And also: "Tech Super Club"? Really? Way to name your own startup pseudo angel investors ... - noupsell, on 10/10/2009, -6/+16I can't tell who submitted this... there is no user icon and I don't know where my darned bifocals have gone off too :shock
- empoprises, on 10/10/2009, -3/+12I went to the privateequityforums.com website to get their side of the story, and the thing that struck me the most was the lack of passion. Even if they didn't charge a cent to presenters and footed the live jazz band out of their own pocket, you'd be much better off going to someone who is passionate, and whose passion can potentially match your own.
- Elranzer, on 10/11/2009, -1/+9Yeah, the guy who submitted this would never get his stories front paged before. Now that the playing field is level and people no longer can auto-digg the MrBabyMan or MSaleem icons, they will Digg stories based on interest...
...and not the username of the submitter... - thegazelle26, on 10/11/2009, -0/+8If you do think about it, if guy X, and Angel Investor interviews 20 startups, charges 5k each, nets 100k, and intendeds to give the 100k to 1 startup (of the 20), then he's out nothing but time, and only has upside... Angel investors no longer need to be rich first, they just found a loophole in life. Diabolical!
- Beylan, on 10/11/2009, -0/+7They don't need to have passion. They need to have money. Passion leads to bad investments. Cold and calculating brings returns.
Don't believe me? Go watch ebay the next time someone auctions off some Jesus toast. - GamerXR72, on 10/11/2009, -4/+11I don't see a problem here. The entrepreneurs approach the rich people, not the otherway around. Nobody forces them pay the money. If they don't want to pay a pitch fee, find someone who doesnt charge one.
- inactive, on 10/11/2009, -0/+6Calacanis has a fair amount of clout within the space, and frankly Keiretsu and the like *are* somewhat scammy. I would know, I used to work at one of these companies.
Realistically, the reason why the forums charge the entrepeneurs is because they (the entrepreneurs) are desperate. The organizing forums need to make money somehow, and the investors won't pay anything. Good investors are inundated by pitches already, so the forums charge who they can. It's just a flawed, broken business model. - PhilPerspective, on 10/10/2009, -1/+651 Diggs in 16 hours? Wanna bet that icons will be coming back like tomorrow? ;-)
- FunnyData, on 10/11/2009, -0/+5If you have a good idea then try going on the TV show the Shark Tank and asking them for money
- inactive, on 10/11/2009, -1/+5It couldn't work for one reason: because only accredited investors can participate. If you can't demonstrate sufficient household worth and/or income, then you can't legally make these types of investments without proper disclosure in a full private placement.
http://www.sec.gov/answers/accred.htm - quarando, on 10/11/2009, -0/+4Yes, but facebook was created by students at harvard. Harvard has tremendous resources for its startups. It would have been much more difficult for facebook to reach the level of success it has without the advantages of being developed at an elite institution. That isn't to say that an average person can't get lucky and become very successful. It is just very, very rare.
- GeorgeClymer, on 10/11/2009, -1/+4It makes it harder at any rate. Though I am shocked!! .. shocked I tell you that this eventually made the FP. It took a lot longer than it would have with the icons. It still took over a day. You can think of that what you will.
- papashawn, on 10/11/2009, -0/+3I'm an angel investor, would you like to present your business idea for $1000/15 min?*
*I have no money and 100% of these requests get denied. - Beylan, on 10/11/2009, -0/+3Diabolical? It sounds like a sound strategy to me. No one forced them to pay $5k and they knew going in that there was no guarantee on getting venture capital.
- InactiveUser, on 10/11/2009, -2/+5I am poor because I don't have the connections that would help me create work.
I am also not about to join the "mens" club and give free faps either.. - Beylan, on 10/11/2009, -2/+5It would be more than ethically wrong, it would be fraud.
- brenisa, on 10/11/2009, -0/+3Actually, if you start a business, there are all kinds of sharks willing to take advantage of you, not just VCs. Sharks are typically the first people to notice you.
- Ninh, on 10/10/2009, -15/+18Angels don't want something from you, you want their money and access to their network. You better straighten up your attitude and work on a business plan or go back to flipping burgers.
- poppy17, on 10/21/2009, -0/+2I'm not sure the writer of this actually took the time to investigate what he was reporting on. The instances he is so incensed about are intermediaries who have built up a database of investors, or who earn their money from putting together "pitching sessions" - not the actual rich investors themselves charging money.
The investors turn up to hear genuine pitches and get no share in the money paid to the organisers. Although they probably do turn up, because they are at least reassured that the person pitching has enough conviction and has taken the pain, to pay money to go along, so he is unlikely to be a wild & wacky "I'm an ideas man".
The organisers are running a business, that's all. You can look for investors some other way if you don't want to engage their services.
But the original statement that "rich angel investors" are charging is wrong. - theviceroy, on 10/11/2009, -0/+2Their investors wouldn't.
- inactive, on 10/11/2009, -1/+3You have to be an accredited investor before you can participate in these forums.
http://www.sec.gov/answers/accred.htm - geoken, on 10/11/2009, -0/+2How is it rare?
Explain to me how Facebook, YouTube and Google leveraged these connections you say are necessary? - Ascus, on 10/12/2009, -0/+2I need to remember this for the next time some Amway rep approaches me about an opportunity.
- bubbachuck, on 10/11/2009, -0/+1it'd be interesting to see how many investors are "self-sustaining" like that...i wonder if there's any form of regulation
- newman8r, on 10/11/2009, -1/+2They're offering a service that some people might find useful
However, this isn't a get rich quick scheme and without a really solid business plan and some experience it's unlikely that paying to get people to look at your proposal will yield much.
Basically, anyone in business needs to know how to do their research before making a large expenditure like this - if you do the research then you'll end up making the right choice more often than not - Darkyuubi, on 10/11/2009, -1/+2Open threats on the internetz
SRS BZNES
That being said, it was quite a badass article actually. - cliffzdude, on 10/11/2009, -2/+3Passion? That's an emotion, investing is about analysis - not emotion. A great investor works hard to keep emotion *out* of his/her investing decisions. The emotional masses are the schmucks who are buying at the top because they can't stand the excitement any more, selling at the bottom because they are too scared, and too scared to invest in a risky start-up. Surely you want to see a start-up is being ran by those pissing vinegar and breathing fire, but to make an investing decision "passionately" doesn't make sense.
- buzaman, on 10/11/2009, -2/+3After they pass the Anti-Dog Eat Dog Bill these greedy Anit-American Angel investors will be no more. /s
- buzaman, on 10/11/2009, -1/+2If he doesn't like it he can work and save up money.
- SanchoMandoval, on 10/11/2009, -1/+2Uh, if startups don't want to pay, they don't have to. If you don't like a service don't agree to use it. At any rate, if they didn't charge a fee and just gave their time to whoever showed up they'd probably get mostly people like the Timecube guy pitching you their completely useless ideas.
- bubbachuck, on 10/11/2009, -7/+8i sympathize with poor entrepreneurs but if the angel investors want to charge you to hear your pitch it's their right since they're holding the cards. of course if they only charged people and never gave out any money, that's ethically wrong but i don't think they would be receiving many applications once the word got out. it's similar to college's charging an application fee...they want to set a minimal barrier to prevent from being inundated with bad applicants. or so goes the idea.
- hascat, on 10/27/2009, -0/+1no, they would have run an auction for seed money
- L0NER, on 10/11/2009, -3/+4Would ebay have paid to pitch to a venture capitol firm?
- InBonobo, on 10/11/2009, -1/+2it seems to me that the fees are not charged by "the rich people", but rather by third parties, i.e., forum organizers who help the offer meet the demand. such forums exist simply because there is far too much capital chasing too few opportunities. the situation is bad, but if the forum organizers start charging "the rich people" (the angels), then we know we're truly fskd.
- quarando, on 10/11/2009, -1/+2Maybe they shouldn't "hold all the cards". This is one of the reasons that our economy and political institutions work in the interests of only a small minority of the population. The people that "hold all the cards" use this advantage to protect and extend their own power while holding back others by denying them real opportunity, unless they have the right connections and come from the right elite social circles.
- ProjectSnowman, on 10/11/2009, -4/+4hurr durr capitalism is the devil everything should be free and we should all live in communes and love each other
/Micheal Moore
You have to spend money to make money. - geoken, on 10/11/2009, -3/+3Kind of like how corporate backed MySpace beat out Facebook.
- zdwade, on 10/11/2009, -2/+1i agree with you 100 percent. this is jus the risk someone takes when pitching, and trying to gain access to money they could never obtain independently. if your idea is good enough sooner or later u wont have to pay to pitch your idea, good luck to all.
- LackyB, on 10/11/2009, -6/+5PRIVATE CITIZENS SHOULD NOT BE ALLOWED TO OFFER PRIVATE SERVICES TO OTHER PRIVATE CITIZENS AND MAKE MONEY DOING IT!!!
Good god. What the ***** is this country coming to? - dengzhi, on 10/11/2009, -3/+1no, and frankly the world would be better off w/o ebay and paypal.
- rebrad, on 10/11/2009, -3/+1This must be Digg Spam as well as being ridiculous and absurd. If you want my money you better be ready to dance.
- Restil, on 10/11/2009, -10/+7Would you like some cheese with your whine? Seriously. The "rich" people charge for their time, because their time is valuable. I can't tell you the number of lamebrained ideas people have pitched to me, and all they wanted from me was to invest a huge amount of time for a share of the business... which had no chance of succeeding. I've listened to plenty of this crap, and I have no money to give them. I can only imagine how many "investment opportunities" someone who's actually offering up money gets. First gotta filter out all the scams, and then all the stupid people who have no business running anything, let alone a startup, and then the ones that are smart enough in what they do but have no business sense at all. Get past all of those, and all of the ones that can't put together a good plan, and the ones that have a good idea that's either too early or too late. That's probably 99.9% of interested parties, and you haven't even found someone to invest with. Keep in mind, the investor already has money and can always find a relatively well paying SAFE investment to keep his money in. If you're going to request someone invest millions of dollars in something that statistically speaking will fail 4 times out of 5 even if everything goes right, the least you can do is put your money where your mouth is. If you aren't positive that you can sell the investor on your business, don't even bother asking.
- asgardshill, on 10/11/2009, -19/+10So let me get this straight - the time of rich investors is now a public commodity that should be free to all comers? As the old saying goes, time is money.
The list of "demands" in this whine is classic:
"In Summary
==================
To recap the email quickly:
a) There is no circumstance where an angel investing group should charge a startup to pitch
b) We’ve launched an investigation into these groups and need any information you have
c) If you would spread the word about this issue by discussing it with angel investors and startups we would appreciate it
d) We are demanding that angel groups waive all fees starting today
e) We are going to crush any group that doesn’t comply with our demands
f) There is no negotiation
g) Angel forums upset by this email: Jason doesn’t care what you think of him and could care less if you email his investors, his mother or the Principal of the Internet to complain about his bad behavior (plus these folks get emails all the time and are used to it)."
Good luck getting a lead sou out of any investor with that attitude, Jason. You whiny, crying idiot. - brad3378, on 10/11/2009, -19/+8I don't see any problems with angel investors charging for their time considering the extremely high risk of their investments that most banks wouldn't touch.
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