Only at YC you get cash for it, at FI you have to pay for it.
YC takes more equity though.

Full disclosure: I’ve spoken at Founder Institute.

Quiet the opposite of Y Combinator…

It never occurred to me that charging fees helps “filter out” all those terrible ideas
that deluge angel investors. I guess that means having the ability to write a check
automatically makes my idea better than another. Sounds perfectly sensible.

Here’s another groundbreaking idea along the same lines.

I’ll start charging my prospects for visiting our website and contacting the
sales team with questions. That means we won’t have to deal with those
“70% of requests from morons” (see above) who obviously have no intention
of ever making a purchase.

It’s astonishing how much rubbish gets generated to protect the status quo.

We’ve worked with startups from their first hires through their sale to companies like Kodak and CBS, and have co-invested with a dozen venture funds (including best of breed groups such as First Round Capital and RRE Ventures.) Not only don’t we make our money by charging entrepreneurs, each of US at New York Angels pays our not-for-profit group over $3,000 annually for the privilege of investing our own cash into startups.

So why, you ask, do we charge anything at all to entrepreneurs? Because, unlike [the also great, legitimate] groups that restrict themselves to ONLY hearing from a very, very few pre-vetted entrepreneurs [cough, cOAFgh] we have a fully open door policy through which we invite anyone to come to us for funding if they think we’re a good match. But given the number of companies looking for funding, and our own limited bandwidth (remember, unlike VCs who get PAID lots of money by their limited partners for finding and investing in deals, we PAY out of our own pockets to do this!) we would simply be deluged by people looking for ‘free money’ if we didn’t institute some kind of gating mechanism. (To put things in perspective, over 3,500 deals are submitted each MONTH through the Angelsoft platform to angel groups.)

We therefore began charging a $150 fee to people applying to us for funding. That is far from exorbitant, and nothing remotely close to the many thousands of dollars charged by some of the organizations that Jason [appropriately] has called on the carpet. But when someone comes to us asking for a million bucks to fund their vision, and doesn’t think it’s worth investing even the cost of a pair of tickets to a Broadway show, that’s a data point that lets us narrow down our fire hose to at least a garden hose of applications. Is it perfect? Of course not. But is it evil? We don’t believe so.

But perhaps you’re right. Given the firestorm and attacks here and elsewhere on the subject (a good bit of which, in all fairness, is quite appropriate, and in which we actively support Jason, whom I’ve known for close to 20 years), we may just end up going the route of many other angel groups and VC funds: not charging any kind of fees so that we don’t get attacked…but then also closing down our current policy of open applications, and simply requiring that any incoming deals be referred to us directly by our members, or other people in our network. Would you prefer that we handled it that way?

As Albert Einstein once remarked, “in science, there are no rewards or punishments…only consequences”

(By the way, I’m happy to respond directly to you or anyone else who would like to discuss this issue in detail. You can email me at dsrose at newyorkangels daht com.)

Golden Seeds

New York Angels

Both are in NYC.

Brilliant article !! keep the good work going.