Iqbal

P.S not that I am saying they do not, but what do they need more, money from customers or money from VC’s

To be fair to Envestors, we had a (free) meeting with them on an earlier web startup we did and they said to us plainly they were not really web tech focused. Maybe they have changed focus since then (a couple of years ago) but there was no pressure on us to go through to the pitch, they were perfectly honest.

Was it the “tech” or the “crunch” in the name that gives you the impression it snould not focus only on tech start-ups?

I don’t normally make generalisations but in the case of Estate Agents, Headhunters and VCs I make an exception. Let’s all be in no doubt: VCs are morally bankrupt and devoid of humanity when it come to protecting their investment.

I can’t get over this guy’s tone that tries ot come across as “the nice guy” and, dare I say it, a victim. His pompous and patronising drivel is reflective of an industry that has long since lost its way and has its head planted so far up its anus that it can no longer see the light of day. What concerns me even more is how people pander to this nonsense.

Let’s be real for a second: firstly, if you get a VC involved in your startup, historical evidence suggests that in all likelihood they will try screw you at some stage. It’s a simple derivative of the fact that your interests are opposed: you, the Founder, want to grow and build, they want you to focus on exit (and think they know how to run the company better than you). When will the VCs of the world either find some hubris (you’d think by looking at the appalling returns most of them produce for their investors this wouldn’t be a problem but apparently it is!).

Secondly, this crusade by Mike Butcher and TechCrunch against Angel Networks etc that charge people to pitch is populist BS and anyone who buys it frankly isn’t worthy of investment on the basis that they are so easily duped. Think about it folks: their main audience is you guys, the entrepreneurs who are naturally opposed to anything that increases your overheads so it’s a no-brainer for them to pick up this cause to pander to their target audience (and make revenues from your many site visits and attendances at conferences) – of course they’re going to be your champion regardless of what they really think.

As an investor I can tell you that the reality is that most of the start-up ideas out thee are dross (sorry, but you are and the failure statistics back me up on this) and there needs to be a filtering mechanism to prevent the whole system clogging up with the crut and investors just taking their ball and going home. This is where the pay-to-pitch model comes n. the Angel networks filter for investors so that when they turn up the jokers and time-wasters aren’t there. I’ve been to Angel networks that do and don;t charge and the difference was marked. I agree with OoTheNigerian that free market economics should be allowed to work and that is what happening.

The final point I’ll make is that in reading TechCrunch (a fine publication I would like to add and one against which I have nothing despite how my earlier comments may have come across), there is a tendency to believe that the only “start-ups” out there are tech start-ups. Of course, this isn’t so. My point is that the TechCrunch crusade against pay-to-pitch is dangerous as if a consensus is formed not to pay-to-pitch (and I feel one is developing) then as this is just a small (but significant) segment of the market, its overall impact will be minimal. The market of pay-to-pitch will continue on other industries unabated and Tech will just get left out an relatively unfunded. Then you all lose.

So think carefully here about the facts and try to separate your emotions of what you’d like to see be the case from what reality demands must be the case. Hey, I’d like to go back to the days when I could watch Premiership football live in my TV every Saturday but the reality is that I have to pay for it because someone has to pay the guys to go and broadcast it. Just because it’s something I’d like to see, doesn’t make it happen.

“Very occasionally …. we may go seek out someone who might be thinking about something similar or have a similar point of view.”

ah! so you’re not one of the tier one VCs currently setting up an outbound calling operation.

I wonder if this guy is really a proper VC at all…

There is a reason why propriety software and open source exist side by side and it is a question of choice. Let the people choose.

If people are being deceived and taken advantage of, that is a different ball game.

I agree entrely with the general sentiment of the post. It was just the comment
“If you think that by paying to pitch for some kind of business plan pitch preparation scheme or Angel network that you will be starting on the road towards meeting a venture capitalist you are basically wrong”

that I disagreed with. Not clever to pay, and certainly not ideal – but it’s not a broken model

http://thebln.com/2009/10/want-fundraising-tips-take-some-from-ceos-who-closed-deals-in-hard-times-i-e-2009/

This is a different thing to using a corporate finance house to help you manage an investment process. Advisers can be very helpful in the latter situation but you need to get the right ones on board and know what you want them to do.

A couple of panels we have run recently have considered how to find and close investors http://thebln.com/2009/09/2009-fund-raising-cheat-sheet/ and the lessons learned by founders who closed funding this year.

They seem pretty relevant to this conversation.

Can work and do work, but at what costs? 5% of capital raised and a huge up front fee is a bit rich, no?

If the venture is worth investing in, my guess is that it could and would have raised the capital in some of the other ways suggested.

A business I’m involved in (not KashFlow) successfully raised the money they needed via London Business Angels.