Angels tread where fools rush in.....

Fred Wilson, referencing a Jason Calacanis post on the iniquity of angel aggregators charging startups to pitch to them, notes that:

..."startup agents" out there that charge entrepreneurs upfront cash to make intros to potential investors. They should also be avoided. A basic rule of thumb for fundraising agents is that they must work on a success fee basis or you should not use them. Otherwise, they have no incentive to see you actually get funded.

Both the agent groups and startup agents that want to charge upfront cash make the argument that it is a quality filter. But that is nonsense. Some of the best startups I've ever seen were totally broke and living and working in a friend's apartment. And some of the worst were well off and working in fancy offices. The ability of a startup to pay has absolutely nothing with the quality of the team and the idea.

Fred calls it a scam. I am told it occurs in the UK as well. The key point here is that one about "they have no incentive to see you actually get funded." if you pay them. Says it all......

Hmm..maybe we should set up a service to validate Angel organisations. For a small fee, of course...