A Letter to Entrepreneurs

Dear Entrepreneur:

It has recently come to my attention that you are making some rookie mistakes raising capital. I’m told some of these have been expensive mistakes, sucking hundreds to thousands to tens of thousands of dollars out of your moth-eaten pockets. As it is in the best interest of the entrepreneurial ecosystem for all parties to be educated, I am writing to you today to address one error you are committing.

That error is the sin of paying to pitch to investors. Please, for the love of all that is good in the world, just stop doing it. It rewards shitty behavior. It props up lame investors. It makes you look like a fool. It propagates bad behavior throughout the ecosystem.

If you really have something cool to pitch, I promise you that investors really really want to hear from you. Trust me. Pick up the phone and make some calls. Talk to your mentors and co-workers and professors and friends and family and make some connections. Do your research. Get in touch with the right investors. You don’t have to pay to get a meeting.

In fact, if you walk up to an investor and tell them “Hi, my name is Bob and I just paid thousands of dollars to pitch to you!” I promise you the investor is going to think: “Wow. Bob’s a moron. I’m sure as shit never gonna fund Bob.”

If you want to pitch investors, make a connection to them. In the world of LinkedIn, Facebook, Twitter, and more (and don’t forget the old standby: the telephone!) anybody with a pulse and useful brain cells should be able to make connections to meaningful investment groups. A few emails and calls are a LOT cheaper than some of the whack things I see going on out there. Let’s stop the insanity.

Of course it is a free country. If you must flush your money down the toilet, then that is absolutely your prerogative. Just don’t expect caviar and wine to spew out when the toilet backs up.



  1. Gary

    Thanks Shawn. I could not agree with you more! Angel groups in Cleveland have begun to charge to pitch, a practice intended, in part,to prepare the entrepreneur for a hierarchical relationship and a win-lose deal. Sadly, it hurts everyone in the ecosystem.

  2. Dan

    Actually I take all of that back if I can get a refund on half the angel investments I’ve made in past…. 😀

  3. Dan

    Start-ups who pay for the privilege of presenting deserve the ‘investors’ they get. Frankly I’d have to question their intellect and abilities. PT Barnum and all that.

  4. Josh Bob

    Great post, Shawn.

    I do have a question, though. Take Boston Harbor Angels – they have a screening, which is free. If you make it through this, you pitch to the entire group, and they charge $400 to cover “administrative fees.”

    What’s your take on that?

  5. Will Herman

    Great post. The only reason anyone would pay is that they are ignorant of other options or are not working the system hard enough. It’s tough, for sure, but options are out there.

  6. John Stack

    About three years ago, I went with a client to one of these in New Jersey. I had advised them against doing it but it was their company and money. About 100 companies paid $1,200 to attend with no news of anything coming out after. As long as there are free forums and investors are putting it out there that they’re actively investing, there’s no need to participate. (I’m hoping your next post might be about emailing in b-plans blindly.)

  7. Jameson Detweiler

    Shawn, great article. In Philly, there’s a lot of discussion about this right now as our only big pitching event of the year is coming up (http://www.angelventurefair.com/). There’s a $250 fee to apply and $1000 if you’re accepted. Of course the “angels” $250 if they register early and $450 if late. (If you’re a non-affiliated investor, you pay $50 extra.)

    My friends and I are working to try and provide better options for startups. Hopefully, we can get the Open Angel Forum in town.

    By the way, I’m sharing this post with a large Philly startup mailing list. Hopefully, people will listen.

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