

An Angel Investor Group Move That Makes Me Vomit - keltecp11
http://www.feld.com/wp/archives/2009/08/an-angel-investor-group-move-that-make-me-vomit.html?utm_campaign=foundrygroup&utm_medium=fndry.gr-copypaste&utm_source=twitter.com&utm_content=site-basic

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old-gregg
I thought it was a well-known fact that "angel" groups who charge for pitching
are just scam artists. My mailbox is full of spam from these groups inviting
us to pitch to them for a "small fee". These dudes even operate like scam
artists: by spamming the hell out of you.

I haven't heard of a single well-known startup like Google, Ebay, Cisco and
thousand of others, that has been financed this way.

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Frocer
Absolutely right -- when we were fund raising we experienced the exact same
thing. I am convinced these angel groups are the biggest scam to first-time
entrepreneurs.

When we first moved out to the valley to fund raise, we didn't know the
difference between angels vs. angel groups. So we thought, oh, what a great
way to pitch to a bunch of angels all at once. When they started asking us to
to fill out a 500-page online application (AngelSoft makes me want to puke),
and asking for $5,000 per presentation, we immediately wrote them all off.

The idea of me having to pay to pitch disgusts me. I even ask one of the
groups outright -- doesn't it make more sense to charge the angels rather than
the entrepreneurs? I mean... they are the ones who have money while we are the
ones starving right?

For all you first-time entrepreneurs out there, please do not waste your time
talking to angel groups like we did. If you network well enough you can pitch
to any angel / VC in the Valley without much problem - and most importantly,
for free.

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gabrielroth
Serious question: Why would a scam group require a 500-page application?
Wouldn't they want to maximize the number of suckers prepared to pay the
$5,000?

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Frocer
Ok, may be "scam" is too harsh. Keep in mind these angel groups are usually
group of rich people who made their fortune from big corporations such as
Cisco, IBM, etc. They are not the type of angels you read about on TechCrunch
(Ron Conway, Ariel Poler, etc).

And typical corporate mindset is "processes". And an long application that no
one ever reads is just part of that process. This is very similar to job
applications -- no recruiters care about your cover letter, but you have to
write one because it's the "way" it is.

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radu_floricica
I don't know about corporate recruiting but I find the cover letter much more
informative then the CV.

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DrJokepu
On the other hand, I find the CV much more informative than the cover letter
due to it's fixed format; you have much less liberty when writing your CV so
any ever so little deviation from a textbook CV can tell a lot of good or bad
things about the candidate. I totally ignore cover letters, I'm not even
bothered to read them.

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jacquesm
No reputable angel investor will _ever_ charge you for a pitch. Same with VCs.
If someone wants you to pay even a minimal fee (such as travel expenses or
whatever they come up with) walk away.

One of the first rules of dealing with VCs & angel investors is you pay _your_
own way, and so do they, until a deal is reached.

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sachinag
The issue is that the "good" angel groups are so concentrated in SV, NYC,
Boston, and LA (generally) that groups outside those areas can get away with
this. To me, the bigger issue is what Brad points out - how few people/groups
actually cut the damn check.

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swombat
I have one word for "angel investor groups" that charge start-ups to present
to them:

Scams.

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flipper
It does seem arse-about that an angel would charge a fee to let a startup
pitch to them. Surely, the angel is the one with the money, and the startup is
the one that needs it, not the other way around.

Charging does solve one problem for the less-than-bright angel - if they
receive enough pitches, it means they don't actually need to work out who they
should invest in, they can make plenty of money from fees.

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movix
This reminds me of the kind of people that claim to be movie producers who
charge you to read your script. It's a fail/fail scenario from the start.

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calvin
I find it ironic that some of the groups he's criticizing have advertisements
showing up in the Google text ads on his post.

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gehant
It would be interesting to know the funding frequency for those Angel Groups
that charge for pitching vs those that don't.

I would assume that they (those who charge) fund at the same rate as other
Angels, which basically makes the claim of "filtering quality" bogus.

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sharpn
How to lose friends & alienate people - charge for pitching without offering
anything better than the next angel investor.

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aheilbut
How do people feel about Angelsoft? Is what Angelsoft offers through Open
Deals different from pay-to-pitch?

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Frocer
Absolute waste of time. Please don't bother with it.

