I blogged about why Startup shouldn’t pay to pitch to angel investors early this year. I wrote that blog entry after discovering that a pay to pitch group is planning to set up office here in Singapore. I feel that there is a need to warn startups in Singapore regarding this pay to pitch scheme. I’m glad that SGEntrepreneurs joined me in warning all the local Entrepreneurs.
But I’m shocked and disappointed to find out today that SGEntrepreneurs is promoting an event by Angel Den. What is happening? I thought SGEntrepreneurs is against it.
I’m equally disappointed that Standard Chartered Private Bank is supporting this. Although I’m not an entrepreneur now, I know I wouldn’t use this bank if I ever want to start another company again. Why should I trust a bank that partners with a pay to pitch group?
And why is YourSingapore.com partnering this event too? What does Singapore Tourism Board have to do with startups?
Venture Capitalists, Angel Investors and Companies who associate themselves with such pay to pitch scheme should be ashamed of themselves. They are not helping the startups. They are preying on the desperate entrepreneur who is dying to find investors to fund their next big thing. I know how it feels to have an exciting business idea but no funding. And I know there will surely be some people joining these pay to pitch scheme thinking that they are really here to help. Those who are serious about helping startups will not charge them to pitch. Reputable angel investors around the world don’t charge to listen to startup pitch. Angel investors make money from investing in Startup. They will be more than happy to listen to your business pitch if it is good. If it is not good, no amount of pay to pitch scheme can help you secure funding.
And don’t give me the crap saying startups are paying for training session on how to do a good pitch. That is like those so called model talent hunter along orchard road who charge models wannabes thousands of dollars for makeup lesson and promising them modeling contracts. Yes, they do get a great lesson on how to apply makeup. I don’t know anyone getting a modeling contract thru this method.
SPRING Singapore has recently announced the Angel Investors Tax Deduction Scheme (AITD). This will encourage more Angel Investors to help the local startups. Even the Government is helping Angel Investors to help startups. I really do not see any reasons why Angel Investors should charge startups to pitch.
I strongly discourage anyone from attending the Angels Den Speedfunding on 27 July 2010. We know that startups who are interested in this “Speedfunding” need to pay US$1100. But who are the Angel Investors that will be at the event? How much funds do they have with them? We have no idea and perhaps we will never know. If you have US$1100 to spare, spend it on your business.
If you still need anymore convincing, check out Jason Calacanis Blog. He started Open Angel Forum to counter these pay to pitch scheme. I hope someone in Singapore could do something similar.
Those who promote or support this event should be ashamed of themselves. No startup should pay to pitch to angel investors.
Update: After my blog entry, SGEntrepreneurs updated their entry clarifying their stand with regards to Angel Den and pay to pitch scheme.
We want you to know that we previously had an article where Bernard argued against Angels Den and its business model of getting entrepreneurs to pay to pitch. While we still believe that paying to pitch to a bunch of strangers is not a brilliant idea, some might see it as a viable option of raising money. We don’t regret alerting this group to this avenue, but we do apologize for not warning you as to what we think of this organization’s model.