Should startups pay to apply to pitch competitions?

November 29th, 2013

Should startups be paying to apply to a pitch competition? I have been thinking about this for a while. I personally dont think I should apply to such competitions which ask to pay even to apply. Forget about paying to pitch (that has a guarantee you will pitch). Any thoughts or experience with this?

Brian McConnell

November 29th, 2013

Never pay to pitch, especially at so-called "angel networks". It's a scam, and at best, you will only expose yourself to very low quality investors, and risk poisoning opportunities with serious investors (who will question your judgement and/or think you are desperate for doing so).

Helen Adeosun

November 29th, 2013

No! Amitra, depending on here you are shouldn't pay for a pitch competition. The guest list is what a lot of these competitions are selling and of course they upsell the attendees. However, all of these people, including investors will be glad to meet you because they love entrepreneurs. For us time is our greatest asset and it's assessing everything's ROI including finding potential mentors, winning money, etc.

If you enter anything go to win make sure you get feedback from judges. I have received $1500 from competitions but didn't pay to enter. If they do ask for a fee, email an organizer and ask for a discount or fee waiver in exchange for promotion. That's what we did for the sxsw accelerator and pitch.

Good luck!

Harrison Magun Digital Media & Tech / Sales and Marketing

November 29th, 2013

I agree with what has been said about never paying to pitch, and it's pretty clear that a lot of organizations and publications feed off the exuberance of entrepreneurs (and wannapreneurs.) I do think there is an exception to the rule, though: some angel funds charge an application fee. That fee is more to ensure that they are spending their time on serious applicants. For instance, Seattle's Alliance of Angels, a well-respected community of angel investors, charges a $95 application fee.

David Crooke Serial entrepreneur and CTO

November 29th, 2013

Absolutely not, if they ask you to pay, it's a scam.

Ryan Selkis

November 29th, 2013

In general, application fees above $100 are a complete scam. Helen's got the recipe: if there are small, nominal fees designed to deter less serious applicants, then apply for a waiver. Just that simple, proactive approach should be enough to pitch for free. If not, it's probably a scam/waste.

Joe Zott

November 30th, 2013

I hate the idea of paying. It is often offered by bottom feeders, but then what is the difference between paying to pitch and hiring someone to raise money for you or paying a finders fee? Would you buy dinner if you were meeting an investor? If you are looking to raise more money would you hire an investment banker? So it is so bad to pay to pitch? My rule is don't waste your money, do your do diligence and if it makes sense go for it. My experience is that it can work (and you sometimes you can get a free pass), but I still don't like it.

Anonymous

December 4th, 2013

I disagree with the assertion that EVERY group requiring an application or a access fee is a scam. Without a doubt, it is less than ideal. But I feel I have gone to reputable organizations that required a fee to pitch, and talking to them about it, they did so for two reasons:

1. To offset logistics costs - this to me sounded like a very BAD reason, especially considering the investors are the ones with excess funds, not the entrepreneurs

2. To screen for serious candidates - unlike most people on this thread, I have to say I think this one is at least a legitimate goal on their part, but not necessarily effective. The group of Angels I presented in front of had 30 other presentations that day, each with a $250 fee to present, and a friend in the crowd told me that 90% were terrible presentations (not that the idea was bad, but the entrepreneurs were unprepared or simply did not present well). That being said, after being told I was in the top 2 that day, I wasn't passed through because no one outside the room watched the video of the presentation and voted for my company.

Was it a waste? Too early to tell. The application fee covers two pitch rounds, so I'll be going through it again after we're launched, and hopefully the traction we have with customers is too compelling to ignore.

Overall, I would say, it's less than ideal to have someone require you to pay. It shouldn't hurt to ask why they require a fee, if it's for screening, ask for a waiver. If it's not granted, I disagree with most of the posts to say you should just rule it out. It may still be worth it, but you still have to do your diligence to polish your pitch, find out who's going to be in the room, and if possible build relationships before and after the pitch.

However, I do concede to the stronger argument against paying fees that says you would be better served spending the time identifying high potential investors (i.e., good fit with your model, industry, etc.) and hustling to get meetings with them.

I hope that's helpful.

Amrita Aviyente

November 29th, 2013

Thank you. I was looking at Women2 pitch competition. Sad part is pay to apply, not pitch. I did ask for a waiver but they said no (unlike many other places who actually do waive).

ibrahim okuyucu Engineering Manager at Twitter

November 29th, 2013

I agree with you Amrita, Why would you pay? Raising money is not receiving charity/donation. Its an investment and 2 way street. Investors need a deal flow as much as startups need investors. So I've never seen good investor participating In such an event. If you have a good story people will be interested. Use your network, angellist anything but paying someone to give you a chance to pitch. My 2 cents Sent from my iPhone

Michael Barnathan Adaptable, efficient, and motivated

November 29th, 2013

Don't do it. I wouldn't trust the VCs who would agree to this type of deal.

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