Jason Calacanis has gone to war against groups that charge startups for introductions to angel investors.
Jason published the diatribe below privately and has already been deluged with responses. (We’ll publish these tomorrow). One angel-introduction business, Keiretsu Forum, has apparently threatened to sue him.
And what do WE think? In theory, we’re not opposed to a small membership or presentation fee (both sides) to pay for some vetting and encourage entrepreneurs and angels to take each others’ time seriously. But the situations Jason describes do sound outrageous, especially with respect to groups that take a percentage of any funding. Good companies/entrepreneurs don’t need to go to cattle calls like this (they just network), and smart angels know they probably won’t find good companies by going. For what it’s worth, we have never heard of a successful tech startup that has had to pay to be introduced to angels.
My Latest War: Angels charging startups to pitch
Recently, I was made aware of a group of angel investors that were
charging startups to pitch them.
Yes, you heard that correctly: the 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.
Last week, a number of the TechCrunch50 companies informed me about
firms calling them to present at their “Angel forums” — only to
discover that they would face fees ranging from $1,000 to $6,000 for a
10-15 minute pitch slot. After additionally investigation by the Jason
Nation (the top 10% of the maniacs who follow me on Twitter), I was
sent details of one epic bastard that wanted $10-$25,000, plus a
couple of percentage points of the value of the deal (you’ll find out
who later in this email).
When I heard this, my blood started to boil immediately. So, I did
what any maniacal, self-absorbed CEO from Brooklyn would do: I started
a jihad against this dispicable form of payola and the people doing
It’s on people … it’s on like a Donkey Kong.
Why it’s wrong to charge startups to pitch
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
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. Seriously,
what is the cost to the party hearing the pitch? If you answered
“nothing” or “the cost of two cups of coffee” you win the prize!
Even if you rent a hotel room and put out breakfast for your fellow
angel investors that’s like $20 a person. You mean to tell me that a
room full of rich investors can’t afford to pay for their own
God-damned $20 in bad coffee, stale pastry and stained ballroom rugs?
To be clear, I am making this a class war because it is one: cash-poor
startups are bringing RICH angel investors an opportunity to become
EVEN MORE RICH. As such, the rich folks should pick up the
non-existent to minimal costs.
Why startups fall for “angel group” payola
Now, you ask: why would any self-respecting entrepreneur pay thousands
of dollars to rich people just for the opportunity to pitch?
Well, the truth is that the more mature — or flat out better —
startups would never pay to present. The best ideas by the best
entrepreneurs get socialized instantly. As an new angel investor
myself, one who has only done two investments of $25,000 and $50,000,
I can tell you that I already get flooded with pitches. I can’t even
imagine the volume of pitches real angel investors like Matt Coffin,
Sandy Climan, Sky Dayton, Tony Hsieh and Ron Conway get inundated
This means that the only people who would pay to present are the
entrepreneurs who are either “less good” or less connected. Now, I’m
being diplomatic here in saying “less good,” in many cases, these
aren’t just folks who lack a track record: they’re simply pursuing a
In other words, if this was Hollywood, the folks who pay to present to
investors are ugly, unpopular and lack talent. I know, that’s harsh
but I’m afraid it is true. If you’re idea is good it will spread–even
if you have no track record. If you’re only option is to pay to get in
front of these folks you’ve probably got an idea that is weak or bad.
Not always, but probably. Or maybe you’re a little naive or desperate
to get things going–I don’t blame you for this startups.
Now, before you go saying “Jason is connected and he has access to
angels” remember that I hustled my way into this industry from
nothing. I networked at free conferences and figured out a way to get
on the radar of uber-angels like Ted Leonsis, Fred Wilson and Mark
Cuban. They paid attention to me because I had good ideas. If my ideas
had sucked, they would have ignored me. Period.
These pay-for-play scams remind me of the “modelling agencies” that
charge people for representation, acting lessons and to have their
headshots done. Trust me kids, Brad Pitt and Kate Moss did not pay to
get representation–they didn’t have to. If you’re paying to get an
agent, it’s because you’re being scammed.
What about ‘presenting fees’ acting as a ‘filter’?
The folks who run these scams are going to feed you some line of B.S.
like “we use these fees to filter out people who aren’t serious.”
They’ll say something like “if we didn’t charge these fees, we
wouldn’t be able to filter through all the applications.”
Really? Well, the angels investors I know are really busy and they
don’t charge fees. If Mark Cuban and Ted Leonsis — two really busy
dudes running a dozen projects each — don’t charge why they hell do
you? Oh yeah, right, you’re predatory DBs looking to double dip!
It’s your job as an angel investors to do the filtering and that
should come out of YOUR RETURNS on your investments. If you have to
charge it’s because either a) you’re a predatory DB or b) you suck at
investing so much that your returns can’t pay for the time that you
spend evaluating companies.
… or maybe c) you are actually a good person who has just never
thought about how smarmy it is to charge a startup for your time?
I’m willing to suspend judgement for a moment and consider all of
What do we want?
At this point I’m calling on all angel groups who are charging to do
two things immediately:
1. disclose what fees they *were* charging, displayed prominently on
the top-level of their website.
2. immediately state that they will never charge these fees — again,
displayed prominently on the top level of their website.
If that is done, well, then this battle is over. We’ve accomplished
our goal and everyone can get back to their day jobs.
However, if this is not done immediately, my group of startup CEOs and
angel investors will begin targeting specific groups for elimination.
We will launch competing, fee-free events directly opposite your
events. We will encourage angels investors, service providers and
startups to boycott your events. You may even find our street teams
outside your events handing out flyers.
This isn’t a joke and this is a threat: stop charging startup
companies to present or we will do everything we can to put you out of
business with a competing, free option.
Now, if you think this is too hardcore and you don’t like my style,
well, I can understand that. If you would rather take this offline and
try to work something out, well, that’s not available as an option.
There is not going to be any kind of negotiation and I’m not going to
meet you for coffee.
Also, I don’t care what you think of me and I certainly don’t care if
you email my investors (like one group has started doing) to tell them
I’m out of control. The people who invest in me know exactly who they
are investing in. In fact, one reason they back me is because I am a
little out of control. Deal with it.
Angel Groups We’re Investigating
1. Keiretsu Forum ($1,000 to $8,000 to present according to sources)
The first group that was brought to my attention is something called
the Keiretsu Forum. They have chapters all over the world, it seems,
and they’ve been doing their program for a long time. I’m told by
people that they charge between $1,000 to $8,000 to present and that a
lot of good folks are involved. This is not publicly available
information: they hide it! Now, if there are so many ‘good people’
involved, well, that’s great because good people will understand where
startup companies are coming from when they demand that Keiretsu Forum
drop their fees. If you have information about this group, please
email it to me at jason at calacanis.com. We especially want to hear
from folks who have been asked to pay or who have paid. Send us the
2. Maverick Angels ($500 to $1,000 to present).
This group is a splinter group from Keiretsu we’re told. They hide
their fees in a “boot camp” to prepare you to pitch (what a joke). If
you have details on this group, again, send it to me.
3. PrivateEquityForums.com (stunnning $14,500 to $25,000 plus 3-5% of
your raise to present!)
We’ve received information that Mike Segal of Joshua Capital Partners
runs this forum that is looking for up to $25,000 and/or 3-10% of how
much you raise! I’m in shock by this one… could this possibly be
true? Do you know anyone who has attended this event or, worse,
actually paid these fees? If so, I need you to email me immediately.
4. Tech Super Club ($595 to present).
This seems like a small event, but folks tell me they are charging
$595 to pitch to angels.
5. Angels Den UK (£850 + 5% of raised funds)
Across the pond we have another reported payola scam that is looking
for big upside in introducing you to angels. Disgusting! Send us the
details of this one if you have them!
To recap this 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 behaviour (plus
these folks get emails all the time and are used to it).
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