Comments on: Is NY Angels a Pay-to-Play Scheme?

By: To2

To2 — Sun, 28 Feb 2010 10:19:34 +0000

I think one of Matt’s best points is that the $150 fee is a turn-off to some good entrepreneurs and potentially hurts the NYA.

By: To2

To2 — Sun, 28 Feb 2010 10:19:00 +0000

I think one of Matt’s best points is that the $150 fee is a turn-off to some good entrepreneurs and potentially hurts the NYA.

By: Jim Kirk

Jim Kirk — Sun, 28 Feb 2010 08:07:28 +0000

That “EZPass” “system” is a laugher. So if somehow you’ve ALREADY GOTTEN FUNDING from one of them then you don’t have to pay the application fee. The hell?
It’s also bizarre, the “please sir may I have another!” mentality espoused by the beta male contingent. “We all oughta thank our lucky stars that Jaysus saw fit to save our undeserving asses!” Investors are out to MAKE A PROFIT. It’s just business, not a moral crusade. If you think nobody else would support those entrepreneurs, it’s because nobody else thought they could make a profit off them (and looking at NYA’s portfolio, you can see why).
You ask why he doesn’t charge the investors INSTEAD of the entrepreneurs, and he says they charge them TOO! So they are eating off both sides of the table.
The MOST IMPORTANT thing for investors to do is JUDGE the applicants, and that’s not something you want to hand off to a lackey. Otherwise what’s the point in having all the experience and skill, if you’re not going to use it?
You can’t even use lackeys as a low-filter pass, because someone who doesn’t understand the applicable market segment isn’t going to be able to tell the difference between genius and madness.
Broken English? Poor spelling and grammar? Guess what, a huge number of startups are founded by foreigners.
Zed Shaw writes about the problems with the NY startup scene:
“Now, imagine you got a spare 20 million to throw around and you want to invest it someplace so you’re going to look for some companies to fund. Here’s your choice:
Option A: A couple of nerds who kind of smell and have this really cool thing that you don’t really understand involving the interwebs which has a very high chance of failing taking all your money with it, or if it succeeds making a whopping few hundred million.
Option B: A couple of slick Harvard MBAs who take you out for rows of coke in Atlantic City, buy you a blowjob or two, and tell you they have a “tiny” hedge fund already worth 500 million and they can give you a return on your investment within one year, and in 5 they’ll be worth a few hundred BILLION. Oh, and if they fail the Fed will bail them out so there’s no risk.
Now, which one will you choose? Obviously, you’re going with the Option B: the guys who know how to make money already, can continue to make money, are rich already like you, and will most likely have a constant government safety net if they fail.”
And “[...] Then again if you do have those things you could just go into Finance and make billions instead of millions.”
http://zedshaw.com/blog/2010-01-19.html
Also see “NYC VCs Can’t Do Math”
http://zedshaw.com/blog/2009-03-02-2.html
Andy Bechtolsheim gave the Google guys $100k after a chat. Facebook moved to SV after Boston investors had their chance but didn’t act. There’s a reason Silicon Valley is the epicenter, and it’s because confident people move with surety, and their confidence is from “game recognize game”. They are expert at judging these kinds of things since they not only did it themselves and thus have their OWN technical expertise, but have been around entrepreneurs their entire careers.
Note none of the top angels are from these “angel committees”. The angel groups are formed so people with money but without the requisite expertise in judgment can get expert judges to vet the startups for them — and that ONE essential thing is what NYA says it doesn’t have the TIME to do.

By: Jim Kirk

Jim Kirk — Sun, 28 Feb 2010 08:07:00 +0000

By: Matt Mireles

Matt Mireles — Sun, 28 Feb 2010 06:30:27 +0000

I turned this comment into its' own post. Lots of comments, including from Jason Calacanis and Paul Graham of Y-Combinator. Take a look: http://www.metamorphblog.com/2010/02/david-rose-why-ny-angels-charges-entrepreneurs.html http://news.ycombinator.com/item?id=1155973

By: Matt Mireles

Matt Mireles — Sun, 28 Feb 2010 06:30:00 +0000

By: Joseph Turian

Joseph Turian — Sun, 28 Feb 2010 03:39:00 +0000

I don’t think that the New York Angels is trying to make a profit with their fees, I think they are trying to reduce their workload. However, their’s is a misguided technique, because I’m sure it alienates just as many good entrepreneurs as bad entrepreneurs. I don’t believe that it separates the wheat from the chaff effectively.
NY Angels should examine the approaches employed by other angel groups to pre-screen applicants. Perhaps they could get creative, and offer internships to students to do the initial screening?

By: Joseph Turian

Joseph Turian — Sun, 28 Feb 2010 03:39:00 +0000

By: Blake Jennelle

Blake Jennelle — Sun, 28 Feb 2010 01:35:57 +0000

It’s great to see this conversation happening in New York. We started a similar conversation in Philly yesterday over the Angel Venture Fair, which charges $250 to apply and $1,000 if you are chosen to present.
http://www.blakejennelle.com/2010/02/angel-venture-fair-frustrations/
It sounds like NY Angels is much more reasonably priced. That said, I understand why you’d like to see pitching be free.

By: Blake Jennelle

Blake Jennelle — Sun, 28 Feb 2010 01:35:00 +0000