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October 13, 2009
My last word on Angel Group presenting fees
Ok, now that I have cooled off a bit, here is my last word on this boring non-issue topic.
Here is the problem I have with Jason’s first blog post:
- demanding zero fees from Angel groups treats them all like they are run by scam artists and provide zero value. That is too broad a brush.
Most angel groups are ok and don’t rip people off. There are scammers and rip-offs who should die a slow death. I do hope Keiretsu does sue because you are right, they will loose. They are already loosing in the marketplace. But to generalize from these to say all presenting fees in all groups are bad is a non sequitur. Minimal bozo fees are ok (<$200). It provides a reasonable bozo bar and helps offset an Angel Group's cost. A well functioning Angel group will get the vast majority of it's revenue from sponsorship and membership fees with presenting fees < 10%. High fees, stock percentages are not ok. As a CEO every vendor on earth has tried to roll me for stock and high fees, accountant, lawyer, PR firm, angel group, investment banks, even Fat Boy Slim wanted 1% of my company (LOUD) to play our IPO party. I have raised over $500M for my companies and invested in over 50 start-ups as an Angel, I have seen every scam there is. The right thing for entrepreneurs to do is to tell these people to pound sand. I am not offended that they tried to scam me, it is a free world.
Reading some of the indignation spewed forth against presenting fees you would think the Angel groups were demanding child sacrifice. Lets go ahead and expose the guys who don't deliver value. Then lets all get back to work.
Posted by Martin at October 13, 2009 4:50 PM
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Comments
Martin,
I have to disagree that it isn't a big deal, but I agree that there there should be some sort of bar. I've seen open angel groups host terrible startups with terrible presentations and no business model or product, wasting everyone's time. But proper filtering of business plans should resolve that issue.
I've also seen the money and TIME spent prepping for the pay to play things. The money is a significant burden, but the amount of time and effort startups put into prepping is wasted on these things, which could be better spent elsewhere (customers, networking, etc). Startups outside of regions with good VC/Startup networks have a lot of trouble making the connections, and are susceptible to the pitches. I think the VC industry as a whole should pledge to shun those events, as Calcanis is suggesting.
$200 seems to high to me, though. That's $200 of money that could go to marketing, etc. Something nominal like $35 makes a lot more sense.
But there should be a clear differentiation between slimy events and reputable events. So who decides? How would we know? I'll propose the NVCA should have an event certification process and logo.
Hope all's well. Your reactions have been great to read--it's a rational conclusion.
Posted by: Charlie Crystle 
at October 14, 2009 9:50 AM
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