This comments speaks to the value of “pay for play” nonsense like DEMO
and Keiretsu Forum.
We must killed the infidels and destroy their homeland! j
We pitched last fall to this group. We subsequently raised what we
needed – but not a penny from this group. When I found out that the
group is pay-to-play, I had to make a qualified decision to ‘get
access’ to a group of investors. Part of that dilligence was
understanding more metrics about funding history, people involved,
other deals, etc….
The k4 group experience has certainly galvanized my thoughts that an
entrepreneur should NEVER pay to play and no matter what questions you
ask. The k4 model is flawed for this reason and there is no incentive
for the k4 people to be clear or honest about funding facts about
their group because it would become clear to the entrepreneur that
it’s not worth it to pay.
Case in point … when asked about history of funding deals, the k4
officials used metrics reaching back to 2001 (nothing in the last few
months from this event). When asking about recent deals – all of the
sudden, they don’t have very good metrics or tracking facilities.
These guys do qualifying pitches once a month and the actual meetings
once a month as well (for the previous month’s deals). They know
exactly what is going on – and over the last year when liquidity has
been non-existent for many angels – these guys haven’t funded
anything. The problem is that there is no incentive for them to be
honest about this – because their model is dependent on the 6k from
6-8 entrepreneurs *every month*.
After the event, when we qualified interest from the ‘Gold Sheet’, we
had over 25 inquiries. When we set up a follow on con-call meetings
for this – NOT A SINGLE PERSON showed up. After engaging with
individuals to make time for 1:1 meetings, the interest wasn’t all
that qualified (almost like someone who feels compelled to rate a
speaker survey as opposed to having qualified interest in investing).
On closer inspection and after I bugged the k4 group about this, I
learned this is common and ‘I need to just stay on them’. Having
raised angel money in the past – i appreciate the need to ‘stay on
angels to get something done’. This was above and beyond the norm. I
did a bit more research and found that the people behind the email
addresses were largely service providers.
In short, entrepreneurs are asked to pay for what is largely a social
event for angels who may not even have the capacity to invest in
anything – along with a handful of service providers who will waste
your time. The model is dependent on entrepreneurs paying the bills –
and if they were honest about the successes of qualified deals, the
deal flow would dry up and the group would no longer be relevant.
Again, we raised what we needed from other sources – but not a dime
from K4. I don’t have an axe to grind – I just feel compelled to
protect any other entrepreneur out there whose most valuable asset is
their time (and money) and tell them to save it. K4 is a waste.
Ohh – one last little gem. There was one blow-hard in the audience who
was effectively a patent troll whose approach was apparently to scour
the k4 meetings for potentially aligned tech and then threaten the
entrepreneurs with licensing conversations. After reading the guy the
riot act off-line about how dis-similar our tech is from this guys 10
year old garbage, I stopped getting calls.