Is Paying to Pitch Really a Scam (or are the folks complaining saying it is for ulterior motives)?

As we mentioned in the initial post, it’s always important to question who are the people making the claims and why they’re making the claims.  In this post we’d like to analyze why specific individuals are making the claim that “Paying to Pitch” is a scam, hear their reasons for making that claim, see what they base that claim on, hear why they seem to ignore so many other facts.  

We’ll be posing numerous questions some of which may appear as if they are not related but we assure you they all are.

Let’s start with Scott Kirsner and his recent Tweet

Scott Kirsner ‏@ScottKirsner

Nice to see HackerChick  unload on the hucksters at Young Startup Ventures, who charge entreps to pitch C-list investors at their events.”

Scott is a reporter for the Boston Globe so we were surprised to see these comments and accusations.  

Scott sounds quite annoyed about the idea of charging entrepreneurs to pitch and so we have a few a questions to better understand Scott’s position. We invite Scott to join us on this forum so that we can get some answers.

Scott – you seem to question the legitimacy of startups paying to present, is that correct?  If so, please tell us why and answer the questions below.

  1. What need do you think entrepreneurs are looking to fill by attending and/or presenting at these forums?
  2. Do you feel that all startups can fulfill those needs completely on their own i.e. with their own network?
  3. What are the main ways companies go about raising funding given that many dont have an extensive network? i.e. should they use investment  bankers?
  4. Do you feel that participating at a meeting where investors are present can fulfill that need?
  5. Do you feel it is worthwhile for startups to attend such events without presenting?

4 thoughts on “Is Paying to Pitch Really a Scam (or are the folks complaining saying it is for ulterior motives)?

  1. Joe-

    I did just tweet to see if I can find examples of VCs funding companies they met at your events. I tweeted yesterday to ask entrepreneurs if they’d been to your event and either had a positive or negative experience. No one has yet responded.

    You’ll notice that in my response, I answered all five of your questions directly. In your latest comment, you ask more questions but don’t answer what was the central question I have: why don’t you publish lists of the startups that present at your events, or even highlight success stories of funding rounds emerging from them?

    Now, you may have a great business without doing that, and congrats. I just think it makes the world a more transparent place — and might get you more paying participants/pitchers — if entrepreneurs could reference-check the events and find out if they have been valuable to people who have participated.

    I left the ball in your court, and you chose not to respond, so I think I’m done here–

    Scott

    1. Scott –

      What we don’t understand is how you took a stance before investigating anything. We’d like to know what your motives are.

      Aren’t reporters supposed to check out facts first?!

      seems strange you’d spend so much time calling us and other conferences out without knowing anything bout us.

      what specifically would you like to know about our presenters? do you really think we’re hiding something if we publish the list with details of all companies in the books we distribute at the summits?

      as we said before, we’ll be responding to all of your questions, don’t doge ours.

      YSV

  2. Hi Joe & Co. -

    I’m glad I inspired you to start a blog.

    I’m not a fan of charging entrepreneurs for access to investors, whether at your events or DEMO or angel groups. Why? I’ve only been covering startups and venture capital in Boston since 1997, but I haven’t yet heard a good examples of an entrepreneur paying to pitch investors and then successfully raising money from those investors.

    But we live in a free market economy, so if you guys can build a business that is based on charging entrepreneurs to be dubbed “Top Innovators” and get onstage at your events, that’s great. My main interest is transparency: I’m don’t think many of the VCs who speak at your events know that they’re going for free, while entrepreneurs are paying to be there. I suspect many would decline if they knew that. And since you don’t list the names of any of the companies that present on your website, there isn’t a way for entrepreneurs to talk to fellow entrepreneurs and find out if paying to be part of the event was useful (IE, did it lead to funding?) I hope you’ll correct me if I’m wrong, but I couldn’t find a list of your “Top Innovators” from any of your recent Boston events. For $1585, it would be nice if you gave them some publicity.

    Now to be totally transparent: I have helped organize conferences, moderated, spoken on panels, and delivered keynotes. Mostly for free, but sometimes as a paid speaker or organizer. I haven’t knowingly ever been part of an event where early-stage entrepreneurs have paid to be on stage. As I’ve said, I just don’t believe in it. At any events I help organize, the speakers are all there for free — money doesn’t get you onstage. So I *definitely* have a bias on that subject.

    Answers to your questions:

    1. What need do you think entrepreneurs are looking to fill by attending and/or presenting at these forums?

    Funding, obviously. Some may not be aware that many free opportunities exist to present to investors, or perhaps they have participated in those events but haven’t succeeded in raising money.

    2. Do you feel that all startups can fulfill those needs completely on their own i.e. with their own network?

    Boston is a pretty open startup scene. Many, many successful entrepreneurs are happy to meet with students or up-and-comers and introduce them to investors. But sure, some people may be unable to network their way to investors. Investors tend not to think highly of these folks, since if you can’t connect with an investor, what are the odds you can connect with a customer?

    3. What are the main ways companies go about raising funding given that many dont have an extensive network? i.e. should they use investment bankers?

    AngelList is one idea that comes to mind. Some companies use Kickstarter. But there are lots of angel groups locally like CommonAngels, TiE Angels, eCoast Angels, Beacon Angels, etc. that supply funding to entrepreneurs with little experience and limited networks. There are events like the University Research & Entrepreneurship Symposium, which invite academic spinouts to present to investors (for free.) I don’t think many startups here use investment bankers as part of their venture funding process.

    4. Do you feel that participating at a meeting where investors are present can fulfill that need?

    I’m not sure. I’d love to see the data on how many startups that present at your events go on to raise funding. There’s much more visibility on startups successfully raising money after pitching angel groups, presenting in TechStars, or pitching at events like last year’s “Shark Tank” style event here in Boston.

    http://www.bostonglobe.com/business/2012/10/28/start-ups-make-pitches-boston-shark-tank-session/eU5ph2WLjlF2fd5qICj1GO/story.html

    5. Do you feel it is worthwhile for startups to attend such events without presenting?

    I think entrepreneurs should always try to get information from other entrepreneurs about whether it is useful to be at an event… whether they’re paying to be there, speaking for free, or even paying to speak. I’d love to see more information on your site about the outcome of paying $1585 to pitch. In the three years you’ve done events in Boston, maybe you could showcase some of the success stories on your site?

    Finally, I think in the interest of transparency, it’ll be interesting to see if you allow any of the comments other people, some of them entrepreneurs, have submitted to appear on this post… And I also remain interested in seeing you publish your lists of “Top Innovators” from previous events, so that other entrepreneurs considering paying the price can talk to those people, or otherwise evaluate whether paying the $1585 has vaulted those “Top Innovators” into the big leagues.

    Thanks for the opportunity to comment–

    Scott

    1. Thanks Scott for the response.

      Hope you enjoyed last night’s game! We greatly admire your efforts in such a complete and timely response. Your efforts towards transparency and keeping this non personal is inspiring to us as it seems like we can now focus on what’s really important.

      We will be happy to release all comments (so far only two, though one doesn’t seem to provide a real name or email) but prefer to do so later as to not clutter your points or ours.

      We will also be sure to answer all of your questions in due time, and will be doing so in segments as to allow for a more thorough examination of each of the points, and make it easier for the readers to come to a sound conclusion.

      So let’s begin!

      With regards to your comment
      “I’ve only been covering startups and venture capital in Boston since 1997, but I haven’t yet heard a good examples of an entrepreneur paying to pitch investors and then successfully raising money from those investors.”

      Our Response:
      Given your long tenure as a reporter, we are surprised you haven’t heard of any good examples of entrepreneurs paying to pitch at conferences (whether ours, at DEMO or the many others) and then successfully raising funding. (We’ll be sharing some shortly)

      Just wondering:
      How long have you spent investigating the subject matter?

      Have you reached out to any venture firms in your network or beyond to see if they’ve ever invested in companies that have presented at these forums as well as asked them for their thoughts as to whether they see value in participating?

      If so, which venture firms did you contact and what did they have to say?

      Regarding your comment:
      “but I haven’t yet heard a good examples”

      We’d like to make sure we understand your stated position.
      1. It sounds from the above statement that you’re not opposed to startups paying for a service as long as it’s a good service. Is that correct?
      2. You’re not opposed to startups paying because they’re “starving”.
      3. You simply haven’t heard of any GOOD EXAMPLES (possibly due to not investigating) and therefore assume it’s not good and is deserving of being called to task.
      4. What do you define as a “Startup”? so many of us have different definitions. Meaning if a company has raised Series A or B and wanted to get access to investors, are you ok with them paying to present?
      5. If a company has raised series A, B and decides that they see the merit in presenting at these conferences, are they still victims or would you concede that there truly is value?
      6. Can you define “Paying to Present”? i.e. if a company receives multiple tickets, a profile in a conference book, coaching sessions, access to panels sessions, and a presentation slot is that ok with you?
      7. Do you feel startups are clueless and need others to protect them?
      8. Are you ok with startups paying Investment bankers or are you against that industry as well?

      As we stated above, we’ll respond to every single point you’ve made but given the amount of information we’ll pause for now on these points and wait for your response.

      Thanks again!

      youngStartup Ventures (Joe & Co.)

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