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Venture Summit | West: Wrongly Charging Entrepreneurs to Pitch VCs

What is old is new.  Entrepreneurs  are stil being asked to pay to pitch.  It’s WRONG.

Two and a half years ago, I wrote a post about a Boston group trying to charge entrepreneurs $4500 to pitch venture capitalists at an event.  Many in the startup community were appalled by this especially folks like Jason Calacanis who created the Open Angel Forum specifically to create an event where entrepreneurs could gain free access to investors.

To quote my partner Seth:

image

THERE IS NO CIRCUMSTANCE IN WHICH ENTREPRENEURS SHOULD PAY TO PITCH THEIR BUSINESS TO PROSPECTIVE INVESTORS.

PERIOD. END OF STORY.

 

Microsoft, who had been a sponsor of the Boston event, terminated their relationship after the pay-to-pitch arrangement was publicized.  I thought all of this activity would die, but it’s 24+ months later and it looks like the idea has been resurrected.  And it makes me just as sick today as it did then.

Venture Summit | West, being held February 13th is an event looking to make money off of entrepreneurs who need to raise money.  The price?  $1585.00.  I suppose the good news is that if you apply and don’t make the cut, they don’t charge you.  But $1600 bucks to pitch VCs?  This is completely backwards and distasteful. They also offer startups a ticket for $400 if they just want to come and network with the VCs at the event.

They are charging the VCs to attend ($500) and they have a bracket for “others” at ($700).  So at least the investors are not getting a free ride on the backs of the entrepreneurs, but can we finally be done with trying to make money off of startups that don’t have any cash?  Come on folks, create a business model where you can make some money but NOT charge the entrepreneurs.  My bet is that many of the VC attendees have no idea this is even going on.

Lastly, if you are trying to raise money, do you homework.  You have many other outlets to meet VCs, including OAF, and simply going to VC websites and finding email addresses.  There are events all over the place where you can network and / or pitch.  Even online.

I hope that companies aren’t taken in by their slick marketing materials.

 

December 12th, 2012     Categories: Company Running, Entrepreneurship, Financings, Frustrations, Venture Capital    
  • DavesBlend

    Hard to imagine, and in Mountain View no less. First clue that there is something wrong: the website auto launches thematic background music.

    • Ryan Critchett

      Hahah! Totally. It’s so corporate-ey. I’ve always believed.. guys in suits who belong in 1992, don’t belong in the startup world of today.

  • http://simplifilm.com/ Chris Johnson

    I mean, really. REALLY. I can access you, Brad, Fred Wilson, Mark Suster, Andy Swan, whoever….with a blog comment…than I can at some douchey networking event nobody wants to be at. I can leave a comment, get to know you, and get a better connected investor that will have more than money to give me.

    • jasonmendelson

      This is a true statement. :)

      Sent from my iPad

      • http://simplifilm.com/ Chris Johnson

        What I’m saying is that it’s more efficient to avoid those things. Money or none, than it is to show up.

        • jasonmendelson

          Agreed. And about your point that you can actually contact VCs much easier than you might think…. like replying on a blog post.

          • http://simplifilm.com/ Chris Johnson

            I don’t mind an event that’s pay to show up, though. I’d pay to hear you talk at an event for charity or otherwise. Hell, I’d pay big money to watch you react to a round of pitches to see how you perceive things.

          • jasonmendelson

            Then you give me too much credit. :). Seriously thought we aren’t anything without entrepreneurs. Just feels very wrong to me

            ———————-
            Jason Mendelson
            Foundry Group
            @jasonmendelson
            http://www.about.me/jasonmendelson

          • http://freepository.com John Minnihan

            I’d pay to hear Jason play guitar + sing (+ have, hey)

            But talk…?

    • http://freepository.com John Minnihan

      Exactly.

      VCs are real people that put their pants on one leg at a time – no need to pay to connect w/ ‘em. All the methods you mention work w/ anyone. If none of these work w/ a partic VC, consider it a useful anti-selection test.

    • Mac

      Agree. Paying for a ‘VC’ audience means they aren’t doing their homework. Engaging everyone on your list, along with a dozen or so more who willingly equip you with all the tools you need when seeking seed or VC capital, just takes a little due diligence and ‘old-fashioned’ legwork. Put in the time.

  • heyehd

    and if you ask them what the investment percentage or dollar amount that is directly attributable to the event is (an appropriate risk/reward question i would think), the answer, if there is one, is grey at best.

  • http://twitter.com/cwood Charlie Wood

    It looks like this event is put on by the same group that did the $4,500 event in Boston.

    • jasonmendelson

      Then they must go away…..

  • http://about.me/lord_nolan Nolan Clemmons

    The SXSW accelerator ALMOST made us pay around $200 just to APPLY.

  • http://www.facebook.com/benbuie Ben Buie

    Agreed. Thanks for speaking out for the entrepreneur.

  • http://www.facebook.com/kpfitch Kristin Pierce Fitch

    Thank you for posting this. I had looked into the conference and I am glad I came across your post so I don’t waste my time or money. I am in Norfolk-Virginia Beach and part of the startup community there- just trying to reach out and build a broader network. My company is ZiggityZoom and we have family and education sites, as well as educational and game apps.

  • http://www.facebook.com/ben.poch Benjamin Poch

    I was just offered an amazing opportunity by an angel network here in Texas. They wanted me to pay $250 for them to “review my application” and then an additional $500 if I was “lucky” enough to be chosen to pitch. I politely declined and sent them a link to this blog post. Thanks Jason.

    • jasonmendelson

      Nice!

      Sent from my iPad

  • http://blog.kwiqly.com/ James Ferguson @kWIQly

    Hmmm –

    You do need to be careful who you support … This is a heads up / questioning of the your position – I rather hope and believe you will think about this …

    TL;DR
    Techstars are backing Web Summit
    Web Summit are running pay to pitch (in their own words In lighter font at bottom of page )

    http://www.websummit.net/startups/index.html
    ==================================================================
    >>As PITCH is one of the many opportunities startups will have at the Web Summit,
    >>all pitching companies will have to buy a ticket for the event in order to gain access >>and pitch.
    =================================================================

    Heres the detail
    me >>
    Disgrace #WebSummit @WebSummitHQ is using #paytopitch to bleed startup attendees – €495 each @techstars support this ??

    @techstars
    >> @kWIQly @WebSummitHQ That’s not our interpretation of it.
    >> Early bird tickets receive a free exhibit. We don’t see it as pay-to-pitch.

    Now from WebSummit what they say on their site and in their promotional spam

    >>”Each week we’re selecting 10 early stage startups from around the world to exhibit for free as part of our Alpha Program. How can we do that? Simple really! We charge bigger tech companies €9,950 to exhibit, and we make it

    ### free for incredible startups to exhibit. ###”

    >>”Recommend a Startup”…
    >>”Do you know of an early stage startup that deserves a
    ###free exhibition stand###
    at this year’s Web Summit? Let us know below!…”

    They sent this email inviting me to respond with lists of Startups for them to spam…

    >>As for October, we want to invite a group of 100 very early stage startups from around the world to
    ###exhibit for free### ,
    and I was wondering if you’d have a minute to recommend 3 start ups that we should consider, in particular from your city?
    You can do so here or just reply to this email. I really appreciate the time and look forward to hearing from you. If you want any more info or to download an overview of our new ALPHA program just visit our website.
    >>

    So If you go to their signup page as a startup you find ….

    >> This year’s startups competition, PITCH, presented by Box™, will see hundreds of startups battle it out on 3 stages over 2 days at the Web Summit. Startups will travel from all over the world for the chance to pitch on the Main Stage at Europe’s biggest tech conference and take home the title.
    >> As PITCH is one of the many opportunities startups will have at the Web Summit,
    ==================================================================
    all pitching companies will have to buy a ticket for the event in order to gain access and pitch.
    ==================================================================

    And so the truth comes emerges….

    >>If you’re selected, all you’ll pay is the price of two ordinary tickets, €495 each, and we’ll give you an exhibition stand for free, along with two tickets and a lot more. It only takes a minute to apply, and it could change the course of your startup forever.

    This sounds very much like pay to pitch – I have huge respect for Brad and the Founders Group and think Techstars is a great initiative so do the sponsers of Web Summit know this is going on via widespread email spam ?

    Andreessen Horowitz, Accel, Atomico, Google Ventures, Goldman Sachs, 500 Startups Sequoia, Benchmark, Battery Ventures

    (not shabby – but lets see what is done in their name)

    “With over 200 investors, including every major fund globally, in one room, shouldn’t you be there?

    Apparently not – To quote your partner Seth …

    THERE IS NO CIRCUMSTANCE IN WHICH ENTREPRENEURS SHOULD PAY TO PITCH THEIR BUSINESS TO PROSPECTIVE INVESTORS.
    PERIOD. END OF STORY.

    I know you guys are very supportive of Techstars – and I think this may not be what you want them to be seen to be supporting.

    • jasonmendelson

      I’m not my brother’s keeper. I don’t find paying for pitching correct. Period.