Some entrepreneurs and big-name investors are pushing back against a contentious practice in the world of start-up financing: pay to pitch. Created during the tech boom of the '90s as a way to screen companies, pay to pitch involves charging entrepreneurs fees, ranging into the thousands of dollars, for the chance to present themselves to investors. While a few companies succeed in securing a check, most go home empty-handed.If I were a high quality entrepreneur with a hot idea, I would favor pay-to-pitch. It's a way to signal my quality to potential investors.
Monday, September 13, 2010
Paying to Pitch
If you are an investor in early stage companies and you want to weed out pitches of lower quality opportunities versus higher quality, how might you go about it? Here's one idea: charge a fee for listening to the pitch.