Jason Calacanis’s blog post Friday attacking angel investor groups who charge entrepreneurs to pitch their startups continues to generate Tweets, comments and blog posts, many from outraged entrepreneurs.
VC Fred Wilson of Union Square Ventures also weighed in for Jason, warning entrepreneurs to avoid not only angel groups that charge but also “startup agents that charge entrepreneurs upfront cash to make intros to potential investors…A basic rule of thumb for fundraising agents is that they must work on a success fee basis or you should not use them.”
However, representatives from two more of the groups Calacanis attacked by name — Maverick Angels and the Keiretsu Forum — called over the weekend to defend their practices.
They said some entrepreneurs have “a sense of entitlement” and believe that whatever they do is worth a hearing. (Entrepreneurs have to believe in what they’re doing or they’ll fail, but “sense of entitlement” is a phrase used by every angel group I’ve talked to). One of these groups also claims that Calacanis’s TechCrunch50 conference makes a lot more money off startups than they do.
Any entrepreneur can apply for a hearing to Maverick Angels or Keiretsu Forum, they said, and those who are chosen to move forward get weeks of free coaching and mentorship on their pitches before they’re asked to pay. Also, entrepreneurs don’t have to pay — they can drop out if they want.
Maverick Angels seems to have more steps in their process than Keiretsu and their fees are staged accordingly. Maverick founder John Dilts, who used to be associated with Keiretsu, said there’s a lot wrong with angel investing — the process is still too random, he said, and the angels have to be controlled as well as the entrepreneurs. At Maverick meetings, for example, angels are not allowed to make long, off-the-point speeches.
The Keiretsu Forum, meanwhile, said that while TechCrunch50 charges all but the entrepreneur to attend, associates of the entrepreneurs chosen by Keiretsu can participate in their process for free. “We are not in this to make money,” a spokesman said.
Jason Calacanis hasn’t gotten back to me on this one, but if he does I’ll add his comment.