Mark MacLeod, a partner at the Montreal-based seed fund Real Ventures, recently posted a list of venture capitalists to avoid that quickly got passed around Twitter. Don’t take money, he advised, from archetypes like “the banker,” “the name-dropper,” “the dude on 20 boards,” etc.
Those kinds of self-interested parties have been circling around the tech scene for years. But perhaps the downward turn in startup financing is bringing back the sharp elbows that didn’t serve as well in a “party round” atmosphere.
Unfortunately, Mr. MacLeod may have another type of investor to add to his list: the dude who makes you pay to pitch.
A startup investor alerted Betabeat to an upcoming event hosted by FundingPost at Credit Suisse’s Midtown office. The entry fee for “entrepreneurs raising capital” is $135 to $150 to meet investors; those who also want to attend a “pitching workshop” will have to fork over $420. “Pitch to 8 VC’s and Angels – GUARANTEED,” read the subject line of an email soliciting registrations.
The event is sponsored by Credit Suisse, among others, and features a long list of speakers, including, New York Angels, StarVest Partners, 37 Angels, ERA – Entrepreneur Roundtable, DreamIt Ventures, FirstMark Capital, Launch Capital, Golden Seeds, Rho Ventures, Canaan Partners, and many more. Unlike RRE and FirstMark, however, most of the speakers are second and third-tier investment firms.
This isn’t the first pay-to-play event FundingPost has hosted. When we looked into the practice in 2011, FundingPost had recently held a lunchtime pitch practice that ran $75 to $350 to present.
The notion of struggling entrepreneurs paying for the privilege of pitching has attracted detractors in the past. Back in 2009, entrepreneur and investor Jason Calacanis wrote:
“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!”
But a new twist on FundingPost’s event offers something more objectionable than just a fee: a set up modeled after a deli counter.
The biggest issue has always been the long lines. Well this year we are adding a take-a-number feature (like the deli counter) where you can grab a bunch of numbers from the investors you want to meet, and not stand on line! We will have all of the numbers displayed on the big screen (and a mobile page for your phone). You can stand on many lines at one time and just go from meeting to meeting, and network in the middle!
You can have #4 at one fund, #16 at another, #24 at a 3rd and plan your evening accordingly! And no, you can run in and grab all of the #1’s at every table as you will miss all of your meetings except one… You need to be at the table when your number is called, or you will be skipped. The numbers will stop at #40, there will be open lines & networking after that.
“As a VC,” said the source who sent us the listing, “I can’t understand why you would want to be on this list, charging entrepreneurs to pitch you in a deli line style format.” Startup founders with or without $135 to $420 to spare might be wondering the same thing.