I thought it was a well-known fact that "angel" groups who charge for pitching are just scam artists. My mailbox is full of spam from these groups inviting us to pitch to them for a "small fee". These dudes even operate like scam artists: by spamming the hell out of you.

I haven't heard of a single well-known startup like Google, Ebay, Cisco and thousand of others, that has been financed this way.

Absolutely right -- when we were fund raising we experienced the exact same thing. I am convinced these angel groups are the biggest scam to first-time entrepreneurs.

When we first moved out to the valley to fund raise, we didn't know the difference between angels vs. angel groups. So we thought, oh, what a great way to pitch to a bunch of angels all at once. When they started asking us to to fill out a 500-page online application (AngelSoft makes me want to puke), and asking for $5,000 per presentation, we immediately wrote them all off.

The idea of me having to pay to pitch disgusts me. I even ask one of the groups outright -- doesn't it make more sense to charge the angels rather than the entrepreneurs? I mean... they are the ones who have money while we are the ones starving right?

For all you first-time entrepreneurs out there, please do not waste your time talking to angel groups like we did. If you network well enough you can pitch to any angel / VC in the Valley without much problem - and most importantly, for free.

Thanks for the advice. Does it cover all groups? I really don't have that much experience with interacting directly with angels yet (haven't needed to dive into that level of funding) , so I thought when we received a "You've been invited to pitch, just give us $1500!" e-mail, it was a good sign.

Serious question: Why would a scam group require a 500-page application? Wouldn't they want to maximize the number of suckers prepared to pay the $5,000?

Ok, may be "scam" is too harsh. Keep in mind these angel groups are usually group of rich people who made their fortune from big corporations such as Cisco, IBM, etc. They are not the type of angels you read about on TechCrunch (Ron Conway, Ariel Poler, etc).

And typical corporate mindset is "processes". And an long application that no one ever reads is just part of that process. This is very similar to job applications -- no recruiters care about your cover letter, but you have to write one because it's the "way" it is.

I don't know about corporate recruiting but I find the cover letter much more informative then the CV.

On the other hand, I find the CV much more informative than the cover letter due to it's fixed format; you have much less liberty when writing your CV so any ever so little deviation from a textbook CV can tell a lot of good or bad things about the candidate. I totally ignore cover letters, I'm not even bothered to read them.

People might think it's more "official" if it's a really involved application, and thus more likely to sucker people into paying the fee.

That is some nice fancy logic you have going there. Are you a mormon by any chance?

I also think it is well known. But it's amazing how many places other then THE places rely on semi-official investor clubs who charge you for pitching.

Often those groups work hand in hand with the local government trying to encourage small business. And they are not strictly stammers, just horrible investors.

No reputable angel investor will ever charge you for a pitch. Same with VCs. If someone wants you to pay even a minimal fee (such as travel expenses or whatever they come up with) walk away.

One of the first rules of dealing with VCs & angel investors is you pay your own way, and so do they, until a deal is reached.

The issue is that the "good" angel groups are so concentrated in SV, NYC, Boston, and LA (generally) that groups outside those areas can get away with this. To me, the bigger issue is what Brad points out - how few people/groups actually cut the damn check.

I have one word for "angel investor groups" that charge start-ups to present to them:

Scams.

This reminds me of the kind of people that claim to be movie producers who charge you to read your script. It's a fail/fail scenario from the start.

It does seem arse-about that an angel would charge a fee to let a startup pitch to them. Surely, the angel is the one with the money, and the startup is the one that needs it, not the other way around.

Charging does solve one problem for the less-than-bright angel - if they receive enough pitches, it means they don't actually need to work out who they should invest in, they can make plenty of money from fees.

I find it ironic that some of the groups he's criticizing have advertisements showing up in the Google text ads on his post.

It would be interesting to know the funding frequency for those Angel Groups that charge for pitching vs those that don't.

I would assume that they (those who charge) fund at the same rate as other Angels, which basically makes the claim of "filtering quality" bogus.

How to lose friends & alienate people - charge for pitching without offering anything better than the next angel investor.

How do people feel about Angelsoft? Is what Angelsoft offers through Open Deals different from pay-to-pitch?

Absolute waste of time. Please don't bother with it.