A few days ago I talked about “doing the work” and skipping the party. Conferences tend to be one of the big things that people distract themselves with instead of doing the hard work of making a product that people actually use and get value from.
Some conferences will waste your precious time, but today I want to warn founders about an evil subculture of event producers who are designing events to scam founders — who are sometimes desperate for attention — out of their money!
[ Click to Tweet (can edit before sending): http://ctt.ec/o7djy ]
The scams work like this:
- Apply for our Summit, Startup Showcase, or Angel Pitching contest.
- Founders spend hours and hours applying.
- Scumbag event producers call founders to “congratulate” them that they’ve been accepted and that the team is “super excited” about their prospects of getting press and investment from the event.
- Founders are stoked and start working on their presentation — investing days in the process!
- The signup package from the scumbag event producers arrives and it includes a $1,000 to $20,000 fee. Some true scumbags take 5% of the equity and angel investment raised at the event as a kicker!
- Founders are super vested at this point, and have been sold hard on the efficacy of the event. Typically the event producers share a long list of VCs and founders who have previously invested. These founders are desperate for attention and they are talked into spending the money.
- Founders demo at event, the room is half empty or worse — it’s filled with lawyers, headhunters, and other service providers who are pretending to be angel investors (they invested in their cousin’s company back in 1999!). Those service providers waste more of the founders’ time — and try and extract more money from them!
Grifters and scumbags have been using this scam on actors for so long that the Screen Actors Guild has rules against it!
Scam artists have been doing this for so long in the modeling space that the FTC — yes, our government’s trade agency — has issued warnings about it.
It’s the same scam:
- We are casting / accepting applications for folks to come be a model / actor / startup!
- Fill out these forms and come in for a meeting so we can get you vested in the process — this will make it harder for you to pull out.
- Sell you on our acting contacts, photography, pitch coaching, and conference, sharing with you stories of others who have “made it big!”
- Take all your money and attack you if you talk about it publicly.
That last part is key: many founders are embarrassed about getting scammed. Well, like anyone who has been abused, a great way to take back your dignity and power is to CALL OUT THE SCUMBAGS who abused you.
Post your horror stories in the comments, and here are some links for background:
From a founder, Lenny Teytelman, “Hey Startup Parasites! We Don’t Have Time for You!” [Inside the Keiretsu Forum (multiple locations, many complaints) & the Collision Conference & WebSummit Dublin Conference]
Brad Feld, “An Angel Investor Group Move that Makes Me Vomit”
Fred Wilson, “Paying to Pitch”
Jason Mendelson, “Watch Out, Boston, a Rip Off is Coming to Town (Young Startup Ventures)” [Inside youngStartup]
Philip Beauregard, “Startup Snake Oil: Scamming Early Stage Entrepreneurs”
Now, as an event producer who doesn’t care about making a profit on events, I’m in a unique position. I make my money from investing in startups, not events. So, when I host LAUNCH Festival, SCALE and Hackathon my goal is “to support founders & inspire innovation” in the hope that one per year of the 20,000+ folks who come to my events will become the next Uber, Chartbeat, Thumbtack, Raise, or Wealthfront — and I will have some share in the company.
I don’t care if I lose a little money or make a little money. We do both depending on the event, and every year we just plow whatever extra cash we have into more events.
At the LAUNCH Festival this year we gave 11,000 of the 12,000 attendees FREE TICKETS. We also gave away 175 of the 225 demo pit tables for free. We sell some at cost as well ($1-3k).
Our model is to charge the companies who have money, and give them some time on stage to be a judge or do a little content about their product.
Paying for a ticket to an event is not evil and paying a modest amount to go to an incubator like Adeo’s awesome Founder Institute is not evil (I think he charges like $1k for 16 weeks or something easily affordable).
If you’ve raised some money for your startup, sure, go ahead and spend money on an exhibitor table or tickets to an event, that’s cool. However, if you have a startup and they ask you to pay huge money to get in front of angel investors … don’t.
My Model: Big Companies & VCs Pay, Founders Free!
Our next event is SCALE on October 13th and 14th and we are going to give 2,500 of the 3,000 tickets to founders and sell 500 to big companies, service providers, and those folks who want to come to the private dinners.
If you want a complimentary ticket to the SCALE event you can apply for a free ticket by answering 20 quick questions. Those questions help us make sure that you’re not a headhunter sneaking in, and to let our partners know who will be in the audience (so answer the questions honestly).
Also, we give the free tickets to folks who have the most complete profiles (AngelList, LinkedIn, and Twitter urls). Again, if you’re a lawyer or sell cloud services, go buy a ticket and support our ‘free for founders’ model. VIP tickets are only $1,995 and include food, seating in the first 10 rows, access to the VIP lounge, and entry into our three dinners (Angel, Founder, and Speaker dinners).
PS – If you know of any scams, or have been the victim of one, WRITE A BLOG POST. Put the name of who scammed you and the emails into that blog post. Put that blog post in the comments below so we can keep track of them. We will put those blog posts on the list above. The only way to stop these bastards is to put sunlight on them.