An offer to Funding Universe

UPDATE: Funding Universe posted a response to this post and has now waived pitch fees nationally as a result.

Funding Universe is expanding their presence in Colorado and they are presenting a CrowdPitch event on September 30th in Denver. It costs $125 to present your company there, and it’s free to attend otherwise.

Some of us vomit when we hear that promising entrepreneurs are being charged to pitch to investors in Colorado (or anywhere). I’m hoping people will stop doing it. In my opinion, If investors want to see companies they (or sponsors) should bear the costs instead of the entrepreneurs.

To be fair, CrowdPitch is an event that is geared towards to general community and not specifically towards investors. It’s designed as a fun investor role-playing “monopoly money” type event. But still, it’s a bummer that companies have to “pay to pitch” in any setting.

So to welcome Funding Universe to Colorado, I’ll offer to pay the presentation fees for half the companies if they’ll match me.

In any event, here’s some more information about the event:

Want to pitch?

At LivePitch early stage entrepreneurs have 4 minutes to pitch to a panel of experts and a live audience of 40 – 70 peers in order to:

1. Discover investor insight.
2. Let the community know what resources are needed to move forward (partners, services, funding, connections, talent).
3. Gain visibility in the business community.

Want to attend, but not pitch?

Attendance is free. You’ll learn how investors think, meet the hottest start-ups in Colorado, and have a lot of fun. You’ll also help decide the winner of the event by investing your monopoly money in the business of your choice.

When and where

When: Wednesday September 30th
Time: 12:00 – 1:30 pm
Where: TAXI
3457 Ringsby Ct.
Denver, CO 80216

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About David Cohen

Geek. Hacker. Investor. Founder and CEO of TechStars.

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  • http://www.nextwave360.com Kevin Smith

    David -

    So, assuming they won't match your offer (and I'm guessing they won't!), do you think CrowdPitch is worth paying for to get some visibility for a start-up? Like you, I loathe this business model, but $125 isn't a ridiculous fee – unlike DEMO or conferences like that – but I don't want to just throw money out the window either…

    Thanks!

  • Pete

    Great sentiment, David way to literally translate putting the money where the mouth is! I look forward to hearing the presentations.

  • http://www.fundinguniverse.com Alex

    Hi David,

    Thanks for welcoming us to Colorado. We will blog an announcement
    that you should link to here soon. Any of your readers in the comments
    here should know though – starting with Colorado, and because of the
    effort you and Brad are leading, we are going to start the trend of $0
    for companies to present at CrowdPitch. How's that for a counter offer?

    We don't want Brad to lose his lunch with us.

    As we go nationwide, we think it's important to help entrepreneurs any
    way that we can. This is one small way of doing that. Thanks for the
    offer to pay half the fees, but since there won't be any, that means
    you owe use 1/2 of $0 this time around.

    See you on the 30th. Let's hope this creates some positive momentum
    in this space surrounding our CrowdPitch events and the other things
    FundingUniverse will be doing as we expand nationally.

    Alex
    Funding Universe

  • Kevin

    Wow – that's very unexpected and very cool of you guys! It's kind of hard to beat that offer!

  • http://intensedebate.com/people/FundingUniverse FundingUniverse

    We are stoked to put our hat in the ring and show our support to entrepreneurship! We are especially grateful to the partners & sponsors that help to make it happen.

    To be honest, the fees were never there to make money (it's not like you're going to get rich off of 5 companies paying $125 to pitch), they were there for 2 reasons:

    1) to make sure that the entrepreneur has skin in the game and values the opportunity to pitch (so they come as prepared as possible). It seems that people don't place as much value on things that are free…

    and 2) to make sure that the presenter shows up. I remember when we hosted a pitching event on behalf of the Dixie Angels and the Vegas Valley Angels. One of the local community development agencies "sponsored" a few companies so that they didn't have to pay a pitching fee. We had about 30 investors in the room ready to hear 10 presentations and 2 of 3 "sponsored" presenters didn't show up bc they had other "pressing" items. That's a hard pill to swallow after getting so many legit investors in the room. Up to that point and ever since, we have never had a "paying presenter" not show up.

    Anyway… bottom line is that we are going back to making the CrowdPitch events free and are pretty stoked about it. Thanks to Brad & David for taking the lead!

    Brock Blake
    CEO
    FundingUniverse

  • http://intensedebate.com/people/smurchie Steve Murchie

    So I have nothing against the guys at Funding Universe, but their model is based on charging entrepreneurs $3-5K to "prepare" them to present at one of these pitch sessions. Waiving the pitch fees is like giving up the "dealer prep" on a new car purchase. David, I respect your opinion, but you need to do more research.

    Steve

  • http://www.fundinguniverse.com Alex

    Hi Steve,

    I sent you a private email on LinkedIn. I look forward to your reply there.

    As a note to blog readers, many of the companies at this CrowdPitch event in Denver (and other CrowdPitch events) do not or did not pay us a dime. It is NOT a requirement. We do have many services that we are hired by entrepreneurs to help with (business plans, financing, etc.), but they are unrelated to CrowdPitch. Part of our help sometimes includes working with them on their presentation for VC's/Angels and events like ours. But that is a byproduct – we don't charge to "prepare" people for CrowdPitch. And now, following Brad and David's lead, we don't charge to actually pitch either. Again, they can choose to pay for help in a variety of other areas, but CrowdPitch is free to all and no other purchase is required to participate.

    We hope to have the Keiretsu Forum (you are the Denver Chapter President, so we hope to engage you working together to help Colorado entrepreneurs) join us in many of our future events. We'd love to work with you to provide quality deals for your membership to look at. CrowdPitch is free for attendees too – free food even! We think we can add value to the Colorado entrepreneurial ecosystem and hope you will welcome us and work with us as we try to do our best to help entrepreneurs in Colorado get funded.

    I hope to see you and your peers at our event on Wednesday, your invited and we'd welcome your attendance. It would be nice to meet you as well. In the meantime, I'd hope you would reconsider your comment here with this new information I have shared.

    -Alex

  • Pingback: Nice Move By Funding Universe

  • http://www.fundinguniverse.com Alex

    Thanks Steve. I'm glad our model makes more sense to everyone now. I'd like to talk with you about your group joining ours to host the CrowdPitch events. I'm traveling but perhaps we could grab dinner Tuesday or Wednesday night? My email is alex@fundinguniverse.com when you have a minute. Thanks again for coming on here and clearing things up.

    -Alex

  • http://www.biggerpockets.com Joshua Dorkin

    I was at the CrowdPitch event last week and it as very well done. I agree with you, David, that I'm not a fan of charging a fee. I'm glad that the guys got rid of it. That said, it was certainly a great opportunity to network with fellow entrepreneurs and some investors. Big thanks to Alex and Brock for putting on the event.

  • http://intensedebate.com/people/springstage springstage

    i've been to one of these before, and it was pretty well attended. most attendees were not investors. some investors were there, however. sure, for $125 it's probably reasonable exposure to a somewhat random audience.

  • http://intensedebate.com/people/dgcohen David G. Cohen

    Simply awesome. Thanks so much, that's really fantastic. Let me know what I can do to help. Please link to any post you do here in the comments once you've written it.

    I'll send that $0 check over right away!

  • Ginger Cohen

    If only all the companies we have to deal with would respond in such a positive way! Congrats.

  • Jeff Jordan

    No surprise here. Brock, Alex Trent and the crew at FundingUniverse aren't vultures.

    I'm hoping this event goes as well as the last Colorado event that ended up drawing a company that ended up being sold to Disney (Kerpoof, I think?).

  • http://intensedebate.com/people/dgcohen David G. Cohen

    Simply awesome. Thanks so much, that's really fantastic. Let me know what I can do to help. Please link to any post you do here in the comments once you've written it.

  • http://intensedebate.com/people/dgcohen David G. Cohen

    Good memory. Of course Kerpoof was voted second best that night after a count of the monopoly money. ;-)

  • http://intensedebate.com/people/FundingUniverse FundingUniverse

    Yeah… that was crazy that Kerpoof didn't win the "best of show." It's goes to show how important a strong pitch can be. Obviously, Kerpoof had a cool company, but I didn't think that their presentation came off as well as it could.

  • Jeff Jordan

    How could I forget? The gal who pitched was visibly ticked! I think that single event is what fueled her fire to get Kerpoof to exit. Gotta love the passion of great entrepreneurs …

  • http://intensedebate.com/people/springstage springstage

    Hmm, that hasn't been my experience. I went to one of these events before and nobody made them go through any prep process. They do offer these services (not near that price as far as I understand things) and they're not required to pitch at CrowdPitch. The bottom line is that CrowdPitch will be free to the presenting companies, and that's a good thing vs them charging. I'll see if I can get them to comment as I don't have much direct experience with them.

  • http://intensedebate.com/people/smurchie Steve Murchie

    Alex -

    Just replied back to you on LinkedIn. Again, I appreciate the clarification and apologize for the mis-characterization. My understanding was that the CrowdPitch events were the "graduation" ceremonies for your clients; instead these events are independent and help market your services. Makes a lot of sense. Mea culpa.

    As I mentioned on LI, I also welcome your entry into the CO market and look forward to collaborating. I believe Brett Child is coming to our Forum meeting tomorrow, and I hope he will announce details about the Wednesday event to our attendees. I unfortunately have a conflicting meeting on Wednesday, but look forward to joining you at the next CrowdPitch event.

    Steve

  • http://intensedebate.com/people/smurchie Steve Murchie

    David -

    OK, I'm the one that needed to do more research :) However, I think their model even further underscores the presentation fees issue: how does a small angel group survive without charging presenters? I can tell you that increasing my member dues to offset the loss of those fees would likely result in a near 100% drop in membership. Given that we are probably the largest and most active angel group in CO, that says a lot about the sensitivity of investors to their own fees, and to the sustainability of these groups. Do you really want us gone?

  • http://intensedebate.com/people/dgcohen David G. Cohen

    Oh, absolutely not. I refer people to Keiretsu all the time. I think it's great that we have a chapter of a credible national group here in Colorado.

    My opinion is one thing, but it is after all an open market. People can pay to pitch if they want to, of course. But I think you do get some adverse selection. Meaning, companies that know how to pitch and have wide access to investors aren't going to bother. I assume it would benefit your membership to allow those with strong momentum and presentations to pitch for free. I think the fees are usually designed for two reasons in most angel groups. First it's to make sure companies are "serious" about presenting (usually a $100 or so fee is used) and second it's to "recoup the costs of helping them make an appropriate presentation". I suppose there are other reasons (I'm sure your differ somewhat at Keiretsu). It's most sad when memberships are unmonitored (meaning, full of non-investors – and I clearly understand that this is not something Keiretsu suffers from but the problem is generally rampant) and fees are used to make sure the venue and wine are nice enough.

    So, in order to try to be constructive, I'd suggest a couple of alternative models to think about. Knowing you, I'm sure you have and I comment and write here for education, so I'm happy to get feedback.

    I assume that the fees go mostly towards the "screening process". In my experience, these processes mostly suck. Why not get rid of it? Eliminate the cost center. Leverage your membership. Any company that is presented by a member gets looked at by the group. If a company can't impress a member of a national organization enough to get him to vouch that the company is worth looking at, then it's probably not. Everyone in the organization should be reasonably accessible for 1 or 2 coffee meetings a month (we all do it anyway, right?) to meet with entrepreneurs. if you're not – then you're not serious about investing in them in the first place. I must have 30+ meetings like this a month. I'd vouch for about 3 a month as "interesting enough" to get looked at by an angel group. Then my reputation is on the line. No further screening needed. No cost. And, bonus, if I see something that I think is interesting, I can coach them a little on getting their presentation in order and I'm the hero for bringing it to the group!

    Thanks for the comments Steve. Nothing here is meant to attack Keiretsu specifically. I've just seen so much disservice to entrepreneurs by taking their money and giving them essentially nothing in return from other groups, that I've formed a strong opinion.

  • http://intensedebate.com/people/smurchie Steve Murchie

    I'm totally with you: I've been on the other side of the table, paying to APPLY to pitch and getting zip. So I am very sensitive about finding the right kind of companies for our investors and building good relationships with the entrepreneurs.

    Interestingly enough, the companies most willing to pay presentation fees are those that are doing well in their fund-raising, as it becomes a more efficient cost of capital. If they can get in front of a qualified group of investors and hit them all at once, it is much faster than chasing down a bunch of individuals. Plus groups typically work from a single term sheet (versus n X number of individuals), so the closing process is less onerous.

    But I keep coming back to the concern that we aren't getting enough promising young business out in front of investors, and I might have a solution. What would you think of a "Pitch-a-palooza" where we get 5-10 early, early stage businesses to deliver 5-7 min quick-pitches to our members at no charge? We could do this as part of a regular Forum meeting, maybe quarterly?

    Let's keep the dialog going – I hate to be cast in among the vomit-inducers.

  • http://intensedebate.com/people/springstage springstage

    No vomit here. Just a little throwing up in my mouth. ;-)

    Sounds like CrowdPitch!

  • http://intensedebate.com/people/smurchie Steve Murchie

    Don't want to duplicate what they are doing for sure. Will coordinate with them for sure.

    Here's a virtual bottle of mouthwash – we can all improve!

  • http://www.fundinguniverse.com Alex

    Your Pitch-A-Palooza idea really is identical to CrowdPitch. Why don't we team up to make the event the best of the best for the next go-around? I believe we are looking at January for our next CrowdPitch event. We'd love to partner with you on it.

  • http://intensedebate.com/people/springstage springstage

    Good to know!

  • http://intensedebate.com/people/dgcohen David G. Cohen

    there's a drop down at the top of the comments.