
Revolutionary Angels' new business plan competition: $250K prize, $5K entry fee - waderoush
http://www.xconomy.com/boston/2009/10/05/revolutionary-angels-launches-pay-to-play-business-plan-competition/
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jacquesm
Boycott these guys. Never ever apply to them, please.

It's a simple rip-off. No serious VC or angel would _EVER_ charge you for
pitching, if they're going to rip you off at the entrance you can be sure
they'll be ripping you off at the exit too.

Until you have a deal, you pay your way, they pay theirs.

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wheels
Not to mention that taking particularly stupid sources of funding can give you
a scarlet A if you wise-up further down the line and need to raise more money.
It's a bad deal even if you "win".

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far33d
Pay $5000 so you can fund someone else's startup!

A prerequisite of "angel investing" is that you actually invest. Here we have
a group of "advisors" funneling other startups' money (not their own) to a
company of their choosing, and taking any upside in their equity stake!

Sick. This makes Boston look pretty bad, and xconomy looks worse for even
giving them publicity for this.

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tom
Ok, I'm going to be unusually harsh for me, but here goes.

If this is really going to be quarterly, that's just shy of $800K in fees per
year and 392 startups pre-paying for "services" and 10% (!!!) of your co.
Yeah, no thanks.

Anyone in Boston is better off hitting the crowded myriad of events (Web Inno,
Open Coffee, etc.) and spending the rest of their money on lottery tickets. At
least with Web Inno and Open Coffee you can meet folks who actually matter in
this scene, unlike their list of "advisers".

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gojomo
_If_ this paid out more that the total in entry fees, with the sponsors making
an additional contribution to the prize pool (which they internally justify as
a publicity and lead-acquisition expense), then I could squint and strain to
make a not-totally-laughable case for it.

Disregarding the time and distraction, this hypothetical alternate competition
could have a slightly-positive expected return in cash for credible entrants.
The feedback and publicity could be worth the trouble. And the whole process
could be seen as a helpful winnowing process, siphoning money towards more-
likely-to-succeed ventures.

But as structured, not only does Revolutionary Angels want their 40% overhead
fee, but also equity in the winner. ("Here. let us buy some of your company
with all of your entry fees.") That's double-dipping when even the 40% single-
dip is excessive.

And gven how generous they've already been to themselves, I would be highly
suspicious of the judging process as well -- they might triple-dip by awarding
the prizes to cronies.

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htsh
This sounds a bit shady to me. They get 100 startups to pay 5k each, then they
choose 2 of those startups to fund 250k and 50k, with 200k going to cover
their costs? In the end, you have 98 unhappy startups paying for 2 startups to
launch and to pay these people.

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YCW10
It is a free country, but this is a gross idea. Thankfully it seems not to be
attracting any entrants. MIT's 100K competition gives almost the same cash
outlay for no equity and MUCH better connections and support. According to his
model he gets 10% AND $800K in "management fees" if everything was to go as
planned (100 entrants per quarter). I hope this is the last we hear of them.

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flooha
The really odd thing is that they will find people willing to pay to be in
this competition.

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Dilpil
$50 is questionable, $5k is laughable.

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thingie
It looks more like a lottery than a "business".

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edw519
I never understood business plan competitions. What's next, project plan
competitions? Data flow diagram competitions?

This is just a bad idea. The business plan is just one (small) piece of what
it takes to compete. What really matters is the business itself, not the plan.

To me, this makes as much sense as cancelling the election and going with the
polls, or cancelling the football game and going with the bookies'
predictions.

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lukas
"how long it can take for new entrepreneurs to win their first meeting with an
angel or venture group" - has anyone had trouble getting meetings with angels
or venture groups? In my experience this is the only easy part of running a
startup.

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echair
This is a well-established business model in poetry contests.

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acangiano
You'd have to be very desperate and foolish to fall for this.

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elblanco
New business plan. Host forums for business plans, charge $5k entry fees. 12
people show up, rent is paid for a year. Host 3-4 a year, buy a yacht.

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jasonlbaptiste
If you're a startup wasting 5k on a business plan competition, you don't
deserve $2.50 let alone $250,000. Some don't know any better though. These
guys should be boycotted, blacklisted, and shamed from anything that is
startup related. Stuff like this really ticks me off.

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ilamont
Would many YC startups be willing to pony up $5k for something like this?
Little chance of winning or getting much visibility. Seems like the $$$ could
be better spent on development, hosting/colo costs, paying the rent, etc.

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cridal
shmucks...

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Alex3917
Revolutionary Angels' new business plan: competition

