Entrepreneurs and other startup economy workers have started complaining about rising fees of events around town—the sheer abundance of tech events in New York has us habituated to all-star panels and pizza for $0 to $5. But while $35 classes at General Assembly inspire the occasional grousing, there is one thing that seems to really get the startup community riled up: events that charge entrepreneurs to pitch.
Just over two years ago, web publisher and CEO Jason Calacanis blew this issue up by declaring war on a set of angel groups that charged founders to pitch investors. “It’s low-class, inappropriate and predatory for a rich person to ask an entrepreneur to PAY THEM for 15 minutes of their time,” he wrote. “Seriously, what is the cost to the party hearing the pitch? If you answered ‘nothing’ or ‘the cost of two cups of coffee’ you win the prize!”
Other bloggers, VCs and web personalities such as Robert Scoble picked up the rallying cry; even the generally well-regarded New York Angels, which charges a $150 application fee, came under fire. The most egregious offender was Keiretsu Forum, which does not advertise its fees, but reportedly charges entrepreneurs between $1,000 and $8,000 to present. Keiretsu, which has chapters all over the world and bills itself as “the world’s largest angel investment community” is still in business. Maverick Angels, another group Mr. Calacanis fingered for “investigation,” is still in business and charges entrepreneurs $250 to $1,000 for its events.
Entrepreneur Greg Costikyan wrote in 2007 of the New England Venture Summit (domain expired, cache is here:
That room of 200 people is maybe 25% other entrepreneurs waiting their turn or listening to other pitches to get a better sense of how to polish their own, and maybe 50% service folks who actually want to sell you stuff, and maybe the other 25% are investors of one kind or another. Of whom the vast majority would never invest in whatever it is you’re pitching. And of the handful who remain, almost all are so junior that unless they go back foaming at the mouth with excitement, it doesn’t really help.
But that was in 2007, you say. Entrepreneurs today are smarter and leaner, and you can find all the VCs you need on Twitter.
In New York, there are a number of pitching events that charge entrepreneurs. The New York Angels still charge $150, which many in the tech scene feel is justifiably low for the service provided and the cover costs of hosting. Ultra Light Startups hosted a pitch panel last week that charged founders $50; the FundingPost recently held an event that ran $75 to present or $350 to present and participate in a lunchtime pitch practice.
So how much is too much? “I’ve always been curious as to why people think pitching should be free,” Ultra Light Startups founder Graham Lawlor wrote in an email. “I think each event is unique and startups should evaluate paying to pitch as an investment, alongside their decision of which lawyer or web host to use. I like to believe startups that pitch at Ultra Light get far more than $50 worth of value in exposure and feedback (and sometimes prizes). I suspect the people who think pitching should be $0 are not running many events themselves.”
“I don’t think they’re necessarily bad or exploitive of founders, or that there won’t be any good companies there,” said Trevor Owens of Lean Startup Machine, a hackathon-style event that charges first time attendees $299. “On the other hand, I’ve never been to one, because I don’t need to meet investors like that. The old fashioned intro works for me and I’ve built up a network in a short time by just being involved.”
Meanwhile, New York founders we spoke to say they regularly get come-ons from pay to pitch events.
“Sadly it’s a cancer… you need to keep screening for it,” Mr. Calacanis wrote in an email to Betabeat. “Event producers get greedy and desperate…. it’s easier to sell to desperate startups looking to get venture money than do the hard work of building a conference with the support of sponsors.”
Betabeat is working on an investigation into the pay-to-pitch economy in New York City. How much is too much? Are naive founders getting ripped off by paying hundreds of dollars to pitch investors? Let us know in the comments or email ajeffries c/o observer.com.