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Is "Pay to Pitch" considered predatory today?

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.

19 Replies

William Grosso
2
0
William Grosso Entrepreneur
CEO, Scientific Revenue
Ridiculously predatory. Bill ---------- Bill Grosso CEO, Scientific Revenue www.scientificrevenue.com professional: [removed to protect privacy] personal: [removed to protect privacy]
Matt Farnell
1
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Matt Farnell Entrepreneur • Advisor
Engineering, Growth at AdRoll
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
1
0
Robert Clegg Entrepreneur • Advisor
Game Based Learning Expert
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.
Tim Scott
0
0
Tim Scott Entrepreneur • Advisor
President, Lunaverse Software
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
0
0
Yasmine Mahmoudieh Entrepreneur
yasmine mahmoudieh
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 [removed to protect privacy] www.myKidsy.com www.mahmoudieh.com
Brian McConnell
3
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Brian McConnell Entrepreneur
Head of Localization at Medium.com
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.
David Crooke
0
0
David Crooke Entrepreneur
Serial entrepreneur and CTO
Yes
Alex Littlewood
0
0
Alex Littlewood Entrepreneur • Advisor
Founder & CEO at Motoroso
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
0
0
Vinit Modi Entrepreneur
Co-Founder Campusly | Mobile Web & User Research Consultant | Strategic Leadership
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?
Robert Clegg
1
0
Robert Clegg Entrepreneur • Advisor
Game Based Learning Expert
So if it's a fee to discourage no shows ... uh, wouldn't you get your money back if you showed up and pitched?
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