Investor pitch · Angel investing

Is "Pay to Pitch" considered predatory today?

Tico Ballagas

May 15th, 2014

What is the current thinking on "Pay to Pitch"? I remember Jason Calcanis' rant on the subject from 2009,
http://calacanis.com/2009/10/09/why-startups-shouldnt-have-to-pay-to-pitch-angel-investors/

but VA Angels in Canada is asking my co-founder for $1K per pitch for a series of 5 pitches, which seems pretty outrageous to me. Would love to hear your thoughts.  

Brian McConnell

May 15th, 2014

Run, do not walk away from these bozos. The odds that you will see a penny from them is approximately nil. Not only will you not raise money from people who are advertising they are so risk averse that they want you to pay them to pitch, you also risk getting pegged as a rube (aka sucker) by reputable investors who would not engage in shady practices like this.

William Grosso CEO, Scientific Revenue

May 15th, 2014

Ridiculously predatory. Bill ---------- Bill Grosso CEO, Scientific Revenue www.scientificrevenue.com professional: bill@scientificrevenue.com personal: grosso@gmail.com

Matt Farnell

May 15th, 2014

You should never pay to pitch. I just checked thefunded.com (yelp for investors) for VA Angels and they are not even listed.

Robert Clegg

May 15th, 2014

Keiretsu Forum charges 6k for 4 pitches. it's the world's largest angel network. if you go to due diligence, there's very high funding rate.

Robert Clegg

May 15th, 2014

So if it's a fee to discourage no shows ... uh, wouldn't you get your money back if you showed up and pitched?

Tim Scott

May 15th, 2014

We were in VA Angels pipeline, and they seemed quite interested in having us pitch. Maybe it helps I'm a dual citizen. However, when we learned of this fee we balked. They explained that the demand to pitch is high, and they use the fee to discourage no-shows.  Whether it's scammy or not, it's a non-starter for us because the travel to get around to 5 cities plus $5k in fees.  No thanks.

Yasmine Mahmoudieh

May 15th, 2014

Good business concept for him! Not correct from my point of view! Best yasmine yasmine mahmoudieh myKidsy ltd techhub@campus 4-5 Bonhill Street London EC2A 4 BX +44 7540136273 www.myKidsy.com www.mahmoudieh.com

David Crooke Serial entrepreneur and CTO

May 15th, 2014

Yes

Alex Littlewood

May 15th, 2014

Ya, Kieretsu Forum is charging $2,500 to pitch at 3 events. Seems very excessive. I've always appreciated the approach to vetting startups on their merits and then inviting them to pitch for no fee. but I also see how this is unsustainable with the massive growth in new companies, especially around here. Asking a startup to pay helps filter by a few variables: First) they're serious and willing to invest if it's the right meeting. Second) it probably helps reduce the applying startups to the ones that already have revenue, which is attractive. 

Would be great to see any org's doing this refund some of the fee to startups if they choose not to move forward with funding the company. 

I think what you have to do when evaluating opportunities like these is run the numbers. $1k for 5 events could be great if you're pitching to 100 investors at each event and could reach 500 angels. But if it's 5 angels at each event, then you're probably getting hosed. And ask for statistics from the org: What % of companies that pitch get funded? What your average deal size? What's the total annual investment made through this org?

I couldn't get a straight answer on numbers from Kieretsu forum, so we never moved forward with them. We paid $75 to pitch at VC Task Force to 5 investors. None of which were going to write a check... it actually turned out to be more "pitch practice", which was valuable as well.

It's pretty frustrating to have people with lots of money, who say they want deal flow, to then say "but you gotta pay me f you want to talk to me". Certainly seems like a kick in the teeth. At least in this example (http://techcrunch.com/2014/05/14/vc-auction/) they're using the funds raised to go towards a good cause. 

Good luck bud!

Vinit Modi Co-Founder Campusly | Mobile Web & User Research Consultant | Strategic Leadership

May 15th, 2014

Keiretsu seems to be doing really well with the pay to pitch concept.

How are they successful in making this happen? And why do they not face any negative backlash?