If you are new to the startup space and angel investing, you probably don’t realize that some groups of angel investors charge entrepreneurs a fee to pitch to their groups. This practice has caused a rousing debate among key players, with some calling it a scam, and others defending it as necessary to cover expenses.
Jason Calacanis, a well-known entrepreneur and angel investor, opened the debate about a year ago in a strongly-worded article on his blog which attacked the practice on ethical grounds, and called out popular angel groups charging fees ranging from several hundred dollars to $5,000 or more. He calls these a scam, and “angel group” payola.
Others, including noted angel David S. Rose, head of the New York Angels and Angelsoft, have spoken out in defense of the practice, at least for smaller amounts, commenting that, aside from covering expenses, it also provides a degree of “filtering”.
To read the full, original article click on this link: Startup Professionals Musings: Should Entrepreneurs Pay to Pitch to Investors?
Author: Martin Zwilling
