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The ability (and willingness) to pay to pitch to angel investors is a filter of a kind, but it's selecting for traits that you don't want in startup founders:
by philk 17y ago
The ability (and willingness) to pay to pitch to angel investors is a filter of a kind, but it's selecting for traits that you don't want in startup founders:
1) An inability to network and sell - if they can't get to see angel investors without ponying up cash, how on earth are they going to get customers?
2) A willingness to spend what is (at the time) a large portion of their capital on something that isn't necessary. By definition if you're looking for angel investment you aren't flush with cash and some of the amounts listed (up to 10K), are substantial amounts of money to waste.
3) An inability to understand the role of incentives in human behavior, specifically, if the angels they're pitching to are being paid then they're more likely to be interested in listening (and getting money for doing so) than actually investing.
Essentially these people are paying money to overcome their lack of entrepreneurial ability. Why any serious angel would view these as better candidates for investment is beyond me.
- smikhanov 17y agoBecause there are top-notch angels that get all the best deals with the best entrepreneurs. I guess there are plenty of other millionaires in the Valley looking for (reasonably) good investment in the tech field, but they can't write "Hackers and Painters", and they can't understand hackers that good because they made their fortune in a hedge fund. "Lack of entrepreneural ability" may actually turn to be a provincial naïvety (think of wannabe-entrepreneur from North Dakota who just came in Valley), and is not usually a sign of certain failure. [EDIT] PG also has an essay on this somewhere.
- julien 17y agoI mainly agree with the article and you. Yet, I cant help but think that the VC/angels market is NOT perfect, in a sense that not all the best project get financed by the best angels. So forum like these still need to exist. However, their business model must change.