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Should You Pay to Pitch Angel Investors? It Depends.

In the fall of 2009, internet entrepreneur Jason Calacanis kicked off some heated debate when he decreed that pay to pitch angel investment groups were a rip off, unethical and cheating entrepreneurs. Pay to pitch refers to a practice where angel groups, conferences, seminars or some other venue chooses to charge entrepreneurs for the right to pitch in front of investors. The people who operate pay to pitch events say it is used to defray expenses, ensure only serious entrepreneurs show up and in some instances the fees are used to make money, e.g,, they contend they are providing a valuable service and feel they should be compensated for it.

You as an entrepreneur can read the debate and take strong opinions about the relative merits or demerits of pay to pitch events and their organizers, but the reality is that this argument like most others is not black and white but firmly gray. And more importantly, does taking some position based on a philosophy that “pay per pitch” is wrong help you raise the money you need.

So the question is not whether “pay to pitch” is good or bad and whether it should be avoided or used, it is whether it will help you. Here are some guidelines that we would offer to understand if pay to pitch to angel investors makes sense for you. These are mainly questions to ask yourself as well as event organizers.