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Should startups pay to pitch for DallasBlue?

May 29, 2008

The short answer: NEVER!

Marc Freedman, who I don’t know personally, runs a group called DallasBlue. Evidently he has been soliciting companies we have profiled asking them to pay him $400 to pitch to his group in an event titled Venture Pitch. I have never heard of the event and have no idea if it is valuable (please comment if you know of any investors who attend be sure to tell me their names). While $400 isn’t a big deal, the idea of charging a fledgling startup to pitch is unsavory. To be frank, I don’t like it one bit. The picture below comes from the DallasBlue website of the audience at another Venture Pitch event. I don’t see any investors that I know (and I know quite a few) and can count less than 20 or so people:

If you are looking for Dallas groups to pitch to you might start with STARTech in Richardson. They don’t charge to pitch. Raising money is hard, it is a numbers game. If you are looking for money start calling investors. I have a list here: Texas VC Directory. Of course, it isn’t complete or accurate, but it is a start. Get on LinkedIn and start looking for investors interested in your space and your location. Remember, there is no easy solution to raising money. NEVER PAY TO PITCH!

The most famous and prestigious startup pitching event is DEMO. They charge $18,500 to presenters for a six minute slot. I personally know the founders of a company that won DEMO and the title of DEMOGOD, but they were never able to raise capital. They put the $18,500 on their credit cards (i.e. they couldn’t afford it) and they are still paying 32% interest on that money. Talk about a ripoff. Mike Arrington and Jason Calacani launched TechCrunch50 as an answer for startups who didn’t want to pay DEMO. Last year’s event (TechCrunch40) resulted in more than $143MM in venture capital being raised by presenting companies. The winner of the event, MINT, won $50,000 from the event organizers. Very cool. Let potential investors and competitors pay to see you pitch, never pay them to watch.

Here in Dallas Laurence Briggs runs an angel group called InvestIN Forum of Angel Investors where he charges angel investors around $2,500 a year to hear pitches from entrepreneurs each month. Update: I learned today that the InvestIN Forum charges startups $2,000 to pitch.  Ug! I emailed Laurence and suggested he reconsider charging startups.  If he responds favorably I will let you know. Investors who actual PAY to see your pitch are much more likely to actually show up and when they do I bet they will listen. Scott Ticer runs an angel group as well, I do not recall the name, but he is a reader and can comment with the details if he so wishes.

Written by Alexander Muse · Filed Under Blog, Startups 

Comments

13 Responses to “Should startups pay to pitch for DallasBlue?”

  1. FGS Says:
    May 29th, 2008 at 8:16 am

    Marc is a pornographer, running a site called LustyFiles.com - run away!!!

  2. Brad Groux Says:
    May 29th, 2008 at 8:19 am

    Great article. If you have a great idea and a good plan have faith and use hard work to catch the attention of VCs.

  3. Chris McCarley Says:
    May 29th, 2008 at 8:31 am

    Great advice and also some good connections/pointers for local ventures looking for funding.

  4. Marc DeWalle Says:
    May 29th, 2008 at 8:48 am

    I attended some DallasBlue events several years ago and here’s my recollection:

    - DallasBlue is a broad business networking organization, not specifically a ’start-up’ organization.
    - they were networking events attended by people looking for jobs or looking to make a sale (lawyers, accountants, consultants, etc). Nothing wrong with that, but not a place for entrepreneurs to find capital.
    - I paid an admission that include lunch or cocktails.
    - at one event several budding entrepreneurs made their pitch (for which they paid) and got little more a practice run for their presentation (I know one of them).

    DallasBlue serves a purpose, but start-up funding is not one of them.

    - Marc DeWalle

  5. Jim Says:
    May 29th, 2008 at 9:17 am

    Nice post. Thanks for the TX VC resource link.

    Here’s a great little article on the how resourceful entrepreneurs can be:

    http://blog.guykawasaki.com/2008/05/opc-other-peopl.html

    Using freely available medium to get their word out… and the free publicity that resulted.

    -Jim

  6. Curvezilla Says:
    May 29th, 2008 at 9:40 am

    Kudos Alex for your candor! It’s refreshing to see someone stand up for what they believe is right and take someone to task for shady practices.

  7. Matt Cohen Says:
    May 29th, 2008 at 12:12 pm

    Alex,

    You say “never” - does this include paying to pitch angel groups? I know several that have a fee ~$250 to set a gating factor for applications….

    Matt @8^1

  8. Alexander Muse Says:
    May 29th, 2008 at 12:48 pm

    Matt - I say NEVER. If an angel group can’t ‘gate’ an application by simply reviewing it I don’t think you should bother pitching to them. Look, deal flow IS the currency of the investing game. Without deal flow a VC or angel is DEAD! They want to see as many deals as possible. Charging $250 to filter out idiots is just plain dumb, I know LOTS of idiots with $250. I know even more kids in college who had ideas they want to pitch that don’t have $250 to fork over to a bunch of 40-something so-called angels.

  9. Alexander Muse Says:
    May 29th, 2008 at 2:08 pm

    Another reader pinged me and suggested that:

    Reputable conference companies don’t charge presenters. Period. It’s my understanding that you, indeed, do have to pay to present at Mr. Brigg’s event. But you might want to check with him, as he may have changed his model on this. You have to pay the Southwest Venture Forum, too.

    I will call Mr. Briggs right now and see!

  10. Marc Freedman Says:
    May 30th, 2008 at 12:52 am

    Alex,

    I appreciate your candor. I do caution you about making blanket statements. Entrepreneurs are not a one-size-fits-all group.

    The DallasBlue Venture Pitch is designed for new founders and those just starting their funding search. It is not oriented to sophisticated and experienced entrepreneurs.

    Our Entrepreneurs group runs the DallasBlue Venture Pitch (http://DallasPitch.com). It offers monthly programs that support and educate founders. We bring in successful entrepreneurs to talk about their experience. Our recent educational seminars have covered area incubators and accelerators, legal issues, and startup marketing. We were pleased to recently offer the only Dallas appearance of the Department of Homeland Security’s top business exec, who was looking for new technologies and products.

    The Entrepreneurs group has top-notch directors. Neil VanHooydonk is Chairman and was the founding Executive Director of NTEC. Lore Levin is Director of Mentor Programs. She is an angel investor, assists Laurence at The Investin Forum, and mentors at STARTech.

    For a modest fee our Venture Pitch doesn’t just put entrepreneurs in front of investors. It also provides support and promotional services. The Presenters package includes a consulting session with an investor and mentor to tune their presentation and personal notes from our investor panel after their presentation. For many entrepreneurs our Pitch is their first real experience in a high-end presentation format with a stage, large audience, critical audience feedback, mic and 20 foot display screen. Presenters are exposed not just to Pitch event attendees. They also are spotlighted in front of our entire Entrepreneurs group with over 1,000 members to find mentors, staff, and business partners, and our greater DallasBlue community with 10,000 total members.

    Our program isn’t right for everyone. But it’s a great value and experience for many entrepreneurs, especially compared to spending $2,500 at the InvestIn Forum, $5,000 with other angel and VC groups, or even $18,500 at DEMO as you noted, and getting nothing in return.

    Regards,

    Marc Freedman
    Founder, The DallasBlue Business Network
    http://DallasBlue.com

  11. Alexander Muse Says:
    May 30th, 2008 at 7:02 am

    Marc,

    So my advice is that you find a couple of sponsors that will cover the revenue shortfall that allowing startups to pitch for free would cause. Ironically, you will likely generate more revenue from the sponsorships not to mention the attendance fees.

    Quit charging startups.

    Alexander Muse

  12. Hendrix Bodden Says:
    May 30th, 2008 at 10:18 am

    Personally, I am not a fan of pay to play, but an entrepreneur must do whatever he/she feels necessary to make their dream happen. I haven’t accumulated enough hubris to advise them one way or the other.

    However, my perspective may be a bit different from many of you as I have spent most of my adult life and career in San Francisco.

  13. Hendrix Bodden Says:
    June 1st, 2008 at 1:36 am

    Alex -

    Did I miss something? What happened to my post?

    H.

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