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October 13, 2009
OK let me clarify something on the Pay to Present Angel non-issue
1. As an entrepreneur I would NEVER pay more than a nominal fee present to ANYONE. I would NEVER EVER EVER issue stock or a % of a deal to an “angel” group.
2. There are for-profit angel groups and pseudo investment banks that DO try to exploit the pitch process. Buyer be ware. Organizations like Kieretsu Forum and Mike Segal are (in my experience) simply not providing a good value to the entrepreneur. These bad apples should not be supported by entrepreneurs or investors. I also believe the high presenting fee (plus equity) business model is not long for this world. But I don’t begrudge them the ability to try.
3. The vast majority of angel groups operate on reasonable fees (<$200) and as non profit break-even enterprises. Calling for ZERO fees is not realistic. There is expense in these organizations and there needs to be a balance between member dues, sponsorship and fees. Jason does these groups a disservice by painting anyone with any level of fees as some kind of dishonest crook.
4. Having a minimal fee is actually a very valuable “bozo filter” to qualify companies. I support minimal fees.
5. The key is in the motivation of the Angel group. The vast majority are just trying to provide a valuable service to entrepreneurs and Investors. There is no vast conspiracy. There is no discrimination.
6. I support exposing the frauds. Lets do that.
7. Angel groups are not like Venture Capital groups. VC’s have a revenue stream (their management fee) with which to pay people to listen to pitches and to do due diligence. Angel groups do not. Trying to equate the two displays an appalling lack of sophistication.
8. There is no news here. What is the news? That there are scam artists there? Anyone with 5 brain cells will sniff them out. This is not rocket science.
9. Entrepreneurs need to only present and use networks that actually provide value. Do you diligence on groups. Ask other CEO’s. If you don’t do your homework you deserve to get scammed.
10. Everyone should settle down and get back to work.
Posted by Martin at October 13, 2009 2:18 PM
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