Much Ado about Jason

Yes, I have read Jason Calacanis’ recent post about “pay to pitch” angel groups.  What is my response or thoughts? The issue of “pay to pitch” is an old issue. Years old. Decades old.   This form of “compensation” has been around prior to angel groups. It’s a form of the investment banking model of a commission or “success” fee. Some angel groups adopted it years ago–because that was the “model”. Times have changed and you’ll find that now that the vast majority of angel groups do not use this model. Market forces over the last decade have reduced this model to a small minority of angel groups.

The group I ran for seven years, Atlanta Technology Angels, has never used this model–and never will. Our group always believed that any money we invested in a company—should stay in the company. Simple model, simple to execute.

Personally, I do not believe in the “pay to pitch” model. Why haven’t I spoken up before? Well, I have, but not publicly. Besides my (former) duties at ATA, I’ve also been busy helping to build the Angel Capital Association and the Angel Capital Education Foundation, two entities that help educate angel groups (and entrepreneurs) about best practices in angel investing. My jihad has taken years and lots of energy, but has been helpful and productive.

Jason certainly has the right to express his opinion, but he just joining an old battle and perhaps unintentionally maligning some angel investor folks that are on his side. However, I wish him the best.

UPDATE: Seems as if there are rumors swirling that this is all a promotional stunt or “revenge” for one of the “targeted” angel groups calling on Jason’s TechCrunch 50 (startup)companies to present to their group/groups (in exchange for a fee). It seems as if there is some ”tit for tat” name calling because it looks as if Jason doesn’t charge for TechCrunch50 companies to present to his audience/sponsors–but he does wrap them in exclusivity.  Looks like Jason also has some history of accusing other fee based groups/conferences of  “payola”. 

Is this all just a competitive issue whereby Jason is trying to destroy what he deems competitors? Who knows….