Honestly, I have confidence in my readers.

Just to let your readers know that our next event will be on **CENSORED** and we would be very happy to meet and explain how Angels Den works to any entrepreneurs reading this who are serious about getting funding. More details at http://www.angelsden.sg.

Andrew Deane
andrew – @ angelsden.com
Regional Director Asia
Angels Den Asia Pte Ltd

Update: Removed free advertising

i have read your comments about paying for pitching vs other funding avenues…

Seems to me that your comments come from a level of naivety around funding and growing a company or idea.

Two comments stand out.. you say “I’m not an entrepreneur now” and “I know what it is like to have an exciting business idea and no funding”

Which begs a question.

Have you successfully raised capital for any venture?
If you have what amount?
Did your investors have a return?

Do you know what it actually costs to fund a venture in time & expenses?

Have you then compared that cost against a pay to pitch for example?

I would appreciate your replies?

To give you a understanding of my experience in this area?
I am entrepreneur and angel investor
Have raised over $4,000,000 from 40 plus angel investors for various ventures and personally invested over $1,000,000 in Singapore companies not to mention sweat equity as well.

Having had this experience when we evaluated the time costs and opportunity in using the Angel Den service for the latest venture it was clear to us that Angels Den was great value for money and excellent service and they factor as part of our ongoing capital and funding program.

The last comment is around costs…. it is relative to how you look at it… some people will say $1,500 wow so much and others look and say wow so little for the opportunity.

At the end of the day if you believe in your idea and venture, then a true entrepreneur will look at all possibilities and avenues with an open mind and how it will realize their business, idea or venture.

My thoughts on this subject!

We pitched to eight Angels which resulted in follow up with 4 of the groups. We are currently in discussions with two. We also found the event to be a highly effective networking opportunity, both prior and after the pitch event we had the ooprtunity to meet with both entrepreneurs and investors.

What struck me was the enthusiasm of all of the entrepreneurs, I heard no negative comments either at the event or at subsequent meetings. The investors were approachable and happy to discuss our business venture as we mingled after the pitch.

I know this is not for everyone, but to us it was good value. The networking with the other entrepreneurs has also led to a potential business partnership.

The opportunities open to small companies in Singapore to get funding are not vast so having a choice ( and it is a choice) available from Angel’s Den in my book is a good thing.

Simon

Firstly, the European market is much bigger than the one in Singapore. That means that 5-6 events a month in UK is probably still a very small % of the entire UK market.

There are also flaws in their data – they may give you all the positive data but excluded the negative ones to create an optimistic image. So what if they have successfully pulled the string for finding funding for over 120 companies totaling more than GBP25m? it indicates nothing about the outcome of those startups, have they failed or have they thrived since they’ve receive that capital injection? Again, capital injection for 120 companies in UK is such a small % of the whole VC market…

What matters to these entrepreneurs is whether or not their business can thrive sustainably over a period of time with the funding that Angel Dens has helped them secure. The popularity of these events is absolutely irrelevant to the interests of the Entrepreneurs.

When the founders of Angels Dens claims that they have been successful, it seemed to be the case that they are more successful in earning income just by listening to the pitches (but without promise of a success outcome for those entrepreneurs who are paying for that.)

However i do appreciate that Angel Dens, with the funding they secure for those startups, gives those entrepreneurs hope for success.

However, it seemed to me that Angels Dens model is to throw a lifesaving ring to a startup entrepreneur who is drowning in the sea without actually maximising its efforts to save them by swimming into it themselves. This is a good effort but probably not enough to be hailed as a saviour for these entrepreneurs who already to have other things in thier busines to worry about.
Angels Dens is nevertheless a good place to go if you wanted a second opinion on your business model etc. But to use it as mainstream method of gaining funding sounds rather farfetched.

I think if Angels Dens was the real deal they would have the guts to not charge the entrepreneurs until investment return has been successfully made, that would give Angels Den more credit with whatever business model they have adopted.

Not a start up myself but in the same vein that the people from Angels Den are saying “if you don’t like it, don’t participate”, I think DK is just raising awareness to let people know what they’re getting into. Nothing wrong with that, is there?
.-= Daryl Tay´s last blog ..Angry Birds On The iPhone – A Usability Lesson =-.

“Most of the criticism of “pay to pitch” you have cited comes from the US, a country with very well established angel networks (it is estimated there are 300 angel groups in the US, roughly the same as the rest of the world combined). Entrepreneurs therefore do not have far to look for angel funding. However, it seems a little erroneous to compare the Singapore with the US given there are no compelling alternatives.”

I do agree that Singapore entrepreneurs do not have many option YET. But if we were to just keep quiet and let these pay to pitch enter our shores, it will become the norm one day. And we will never have Angel Investor who are willing to listen to entrepreneurs pitch without a fee.

Something here is fundamentally wrong. Why is the fee so high? Shouldn’t Angel Investors be earning thru funding the correct company? Why does it seems like listening to pitch is able to make a decent income too?

My name is Barry Jones, and I am the Singapore Country Manager for Angels Den.

I would first like to give you some personal background. I have spent the last three years of my career working with entrepreneurs in Singapore (see http://www.maroonanalytics.com for my background). In this time, it has become clear to me that Singapore is desperately in need of an effective angel network – pretty much every early stage company I have met is struggling for funding. There is simply too big a gap between the seed stage government support that is offered, and an increasingly conservative VC community.

To give you a little perspective on the market failure we are dealing with, it is interesting to note that one of the companies I have worked with was recently featured on the SGentrepreneurs website. They have cutting edge technology, but have not been able to get funded and have been surviving on fumes for the past 18 months. They were even awarded a TECS grant, but were unable to draw it down as it would have required more equity investment in items that were excluded from the grant!

The need for an effective angel network is further borne out by the resources page on the SGentrepreneurs website. Only SVCA and BANSEA are listed. SVCA members are not interested in funding early stage deals, especially those outside the technology space. As for BANSEA, I am a member. The organization significantly lacks resources as angels are not willing to pay the membership fees, and is staffed by one part time (and overworked) employee. For this reason, hardly any deals get done. The article you featured by Meng Weng also paints a bleak picture (http://bit.ly/aMB4FP)

Building an angel network requires a considerable investment. First, you have to find and engage a deep pool of angels. Secondly, you have to spend a lot of time screening deals, plus grooming entrepreneurs to make them investor ready. Third, you need events that get everyone in the same room. To date, no-one has been willing to make this investment, not even the Singapore government. Angels Den have made that investment, and as private sector player they will seek a return. In choosing a fee structure that comprises an upfront fee to cover overheads, and a performance based fee for deals closed, they are simply replicating a model that is used in pretty much every sector of the capital markets.

Most of the criticism of “pay to pitch” you have cited comes from the US, a country with very well established angel networks (it is estimated there are 300 angel groups in the US, roughly the same as the rest of the world combined). Entrepreneurs therefore do not have far to look for angel funding. However, it seems a little erroneous to compare the Singapore with the US given there are no compelling alternatives.

Angels Den is still in its infancy in Singapore, and only time will tell if it is the solution to the problem. However, as Bill and Andrew have pointed out, it is a promising start as deals are getting done. You should also be aware that when Angels Den was founded in the UK in 2007, it received similar criticism. However, there was a similar problem that needed to be addressed. Fast forward 3 years and Angels Den is holding 5 – 6 events a month, and to date has funded over 120 companies totaling over GBP25m. The critics seem to be pretty silent now, and the model has been widely accepted.

Angels Den is not for everyone, we don’t claim it is. We provide a service which allows rapid access to an angel network, business advice and coaching in how to pitch. Entrepreneurs can weigh up the value of this service, taking into account the opportunity cost of recreating our capital network and their existing skillsets. When I meet with entrepreneurs, I am objective and transparent – I turn down the majority of entrepreneurs who get in touch with us. I am also looking at ways to reduce the cost of the service via subsidy, much in the same way that BANSEA offers a subsidized mentoring program for entrepreneurs.

I have sent you private emails, in which I will invite you to join me for a coffee to debate the issue further in person. That offer is open to anyone else who is concerned about Angels Den, my contact details are on the website. You will find that I am a passionate advocate for entrepreneurship. All I ask is an open mind, and a willingness to think a little deeper about the fundamental problem we are facing.

Best regards

Barry Jones