Now That’s How You Do An Angel Pitch Event

I attended the second Open Angel Forum in Boulder tonight.  Simply put, it was dynamite.

This is an intense week for seed stage stuff in Boulder as TechStars Demo Day is tomorrow where 11 new companies are having their coming out party. The Boulder New Tech Meetup had a special double header (Tuesday and Wednesday) where six teams practiced their pitches to a room of 300+ people on Tuesday followed up by the other five on Wednesday.  The streets are crawling with angel and early stage investors – local and from other parts of the country – and the vibe feels great as tomorrow is the big day.

I had high expectations for Open Angel Forum after the first one in Boulder in the spring.  Jason Calacanis came up with a great format when he created Open Angel Forum and David Cohen has done an awesome job of hosting and coordinating the two Boulder events.

The format is ideal.  20 qualified angel investors – to qualify you must be active making angel investments (at least three in the past year).  Six companies all raising seed rounds ($1m or less).  Dinner and drinks paid for by sponsors.  No fee to either the entrepreneurs or the angels.  Casual setting (we did it in the TechStars Bunker) – some mingling before it got started, followed by five minute pitches + five minutes of Q&A for each company.  The whole thing took an hour – just the right amount of time.

All six companies – Pavlov Games,,, Awesomebox, PlaceIQ, and BrowseAndPay did excellent jobs.  They were each high quality and totally fundable and I heard several commitments happen during the evening.  I left about 45 minutes after the pitches ended – the event was still in high gear and with Jason leading a table full of angels and entrepreneurs in a game of Texas Hold’em while the beer drinking and discussions continued.

The thing that is so cool to me about this is that it’s a super high signal to noise ratio – all the companies had clear, tight, and relevant pitches and the entire audience was accessible angel investors.  No BS, no posturing, no fees for anything – just entrepreneurs and angels doing their thing.

Over two days, 17 early stage software / Internet companies are having high quality exposure to angel and seed investors in Boulder.  And on Saturday, we have TEDx Boulder.  It’s good to be back in town.

  • Awesomebox is pretty intriguing from a curation perspective. Perfect timing considering the deal-of-the-day craze going on now.

  • Brade, Wish I could have made it, next time for sure!!!

  • Sounds like the OAF event went well, is there a video posted of this anywhere. The pitches for the TechStars were much better than the night before, seemed tighter and all were able to get their points across clearly. Robert did something interesting at the end with a vote or "invest your one dollar" in on company at the end, with and coming out on top from what I could tell.

  • Don't do any video! You will put everyone that makes an investment into an OAF startup at risk of 200%+ payback penalties. Every Angel group knows this.

    You cannot just go out an publically pitch a startup for investment… it's against the law. Big-time. You OAF guys should know that, by now!

    The organizers of an Angel Group, are subject to being declared "Finders", unless they do anything more than give out a name from their Roladex. If the do anything more, they are subject to penalities starting with 200% of the amount invested by the victims (investors)… accredited or not. All the investors will be returned their investment, 200%, plus penalities, if the SEC rules are violated.

    That is just one of the reasons why it is so treacherous to operate an Angel group. You have to know the law (Reg D, section 505/506, etc), otherwise for years you are potentially going to hear from lawyers representing those investors who wrote checks, and lost.

    I presume that Jason and the OAF did all their homework about this, before putting everyone involved at risk!

    • Steve – I encourage you to watch events online like Demo, TechCrunch 50, etc. You are operating under a certain rule framework and assumption about what “pitching” means vs. “promoting.” The rules have plenty of nuances and one of the challenges occurs when you institutionalize the actual activity.

      I'm not really interested in getting into an argument about Reg D here, especially in the context of accredited investors and legitimate securities exemptions, full documentation, etc. I think your facts are limited to a set of cases that you are expanding to include any conversation between an investor and an entrepreneur, which is not a valid assertion.

  • I made a bad click in IE8 and ended up posting my feedback on this post, onto an older post. Meant to post it here:

    The K4 has 850 members and has funded 220+ startups since 2001. Every Angel participating in the Keiretsu is a legally documented, accrediate Angel investor. 90% of Keiretsu Forum meetings start early in the morning, last 5+ hours, and are structured/timed right down to the 5 minute level; over 100 Angels attend most meetings.

    Each of five startups present to K4 members for 20 minutes, then take live Q&A for 10 minutes. Then the entrepreneurs leave the room, and more intensive Q&A occurs between the Angels, as a run-up to a ~60-day diligence process. There is no beer drinking or Poker. Keiretsu Forum members have invested in 220+ startups; have made sizeable donations to over 200 international charities, and have never criticised any other group (except for me, criticising Jason).

    Jason Calicanis is at the root of the OAF, and it doesn't require genius to see that he is one of the most immature, publicity-seeking personalties in the high technology business. Why affiliate with him?

    • Steve – I responded to your other post but I'll put the response here also.

      Steve – I respect your perspective on Keiretsu Forum. However, I've had numerous entrepreneurs approach me and ask if it made sense for them to pay Keiretsu Forum to pitch at their events. I think this is a horrible practice and wrote about it a while ago, before Jason's attack on Keiretsu Forum started. My understanding is that Keiretsu Forum has considered, or has changed, their policy of charging companies with respect to early stage companies. As someone who hasn't paid much attention to how this has played out, I don't know what the current state of play at Keiretsu Forum.

      Regard Jason – I think what he is doing with Open Angel Forum is dynamite. I know he was aggressive in his confrontation around Keiretsu Forum – that's his style and it's something some of us love about him. And regardless of our difference of opinion on Keiretsu Forum, I'm perfectly happy to accept your viewpoint that you think it's useful for entrepreneurs. My person focus on this issue is to create as many free venues and forums for entrepreneurs and active angel investors to get together to try to put together financings to create new companies.

      And – in my world, entrepreneurs enjoy drinking a beer and playing poker, especially with their potential angel investors, after having a pitch type event.

  • Brad – I am not in any way trying to give you a hard time about the OAF. And i think it's amazing that you can size startups up in 5 minutes and everyone can spend the rest of the time playing poker.

    I spent 25 years in Silicon Valley and when i was a member of the Keiretsu Forum, i met some of the nicest, most generous, and least egotisical people of my career, all looking to help startups and charities. Then a year into my membership, along comes this Jason kid raising hell on them.

    Jason invited me onto his internet TV show to debate, then cancelled, put me on Skype, wielded a toy AK-47 during the interview, and muted my replies. Now, i know you have a lot of class and aren't like that at all.

    Consider, Brad – there is $26B per year in Angel investment going on in this country – excluding real estate – a number equal to VC investment – across over 300 Angel investing groups. The K4 is the biggest, most successful Angel group so they should be treated with respect. They are successful and generous people out to help entrepreneurs. NOT crooks, thieves, and frauds as portrayed by Jason. THAT is my point.

    • I get your point and again am comfortable having a respectful / good relationship with you while still having a different perspective. I think it's gross when any angel group charges entrepreneurs to pitch to them. That's my issue with KF.

  • Brad, while trading my own account for 8 years after selling my company, i ended up getting Series 7, and Series 63 securities licenses; then when i got active as an Angel i learned a lot more, so hear me out.

    Startups can not go out and "pitch the public" for investment. There are plenty of borerline activities, in events like TechCrunch 50, the various "Startup Pitch days" that i have covered on my blog, etc. But if the SEC ever wanted to crack down, all of that would be called into question. The Government has wisely decided to "look the other way" and let all of that go on, as long as terms of the offering aren't specified; that's the line in the sand.

    {exceeded max post length – will finish with a reply}

    • Whenever a startup pitches a group of people (not an individual accredited investor) for an investment – especially when the terms of the offering (# shares, valuation, closing date, convertible terms, bonds, etc ) are discussed – then whoever is involved has to be careful. The SEC inforces federal securities law relating to public and private securities offerings originating from the Securities Acts of 1933 and 1934 (amended by the Financial Reform Bill, FINREG, of 2010, which changes the definition of "accredited investor").

      For good reason, it is illegal for a startup company to conduct a "public offering" without registering the offering with the SEC. Which means Investment Bankers, Red Herrings, etc. If a startup were to pitch an Angel Group and it were to be broadcast on the internet, that constitutes a public offering of stock. The SEC defines what a "finder", "agent", and "broker" is. All parties involved are liable to pay back investors, 200% + penalites, if an accidental public offering is made. This creates a long-term liability overhang for all involved. Ask Sue Preston of SF; she's written two books about it.

      • Steve – I think the point you are missing is that these are not formal solicitations for financings. Detailed financing and financial disclosure is not made. No deal terms are represented. These are introductory presentations that result in conversations and discussions with potential investors. There are no SEC violations here – this is not an issue of the SEC looking the other way; there are no PPMs distributed, no formal documents distributed, no formal terms proposed, and no "fees" for any intermediaries in the mix.

        It feels lik you are now fear mongering for some reason. I don't get it.

        • No, I'm not looking to fear monger or throw any wrench in the works!

          If the OAF meetings are not pitches for financing, there should be no problem. I don't care either way. My comments were triggered strictly in reaction to the treatment I received from the OAF's founder Jason. "Treat as treated", just paying him back with the truth, and helping you and David out, wrt not posting any videos. And hopefully shedding some light about some things you should be careful about.

          All offered constructively! Don't get get too uptight – take a run:)

    • They are not “pitching the public” in these situations. These are not “public” events.

  • I encourage you to watch events online like Demo, TechCrunch 50, etc

    Now, Brad – i know we don't know each other but fyi —

    In 2009 I attended over 100 technology industry conferences. For example I was hanging out with Maria Bartiroma at CES, while you and your Dad were checking out PogoPlug:) I was at the Demo event with Greg G. here in Seattle 2 monhts ago, and know all about their heritiage from many years followig them, Chris departure, etc. Am am a regular attendee at the Churchill Club in Silicon Valley, and many other similar West Coast groups; I'm an LP in several VC funds, consulting for Sequoia and other VC's. So I am not operating in a "vacuum" in making my commentary.

    • My comment wasn't to question your credibility, but that your implication is that the TechCrunch events and Demo events are violating security laws. They aren't.

  • Brad, I would agree with you about it being gross about any Angel group charging entrepreneurs just "to pitch". But having been a member of the K4, and getting to know the micro-mechanics of what's involved, changed my perspective.

    For example, the K4 has 19 full-time employees to pay. They have hundreds of accredited investors at each of their meetings. They feed them at 7am, and the meeting run 5-6 hours; afterwards there are luncheons and special events. The entrepreneurs have a chance to bond with all the ceo's, former ceo's, serial entrepreneurs, in attendance.

    I respect the OAF because you and David are involved. Keep in mind, the 850 K4 members, don't even want to engage about this – i am the ONLY one. They are too decent to respond to provocation.

    You seem to assume that large-scale Angel groups can be operated without expenses. But look at the OAF. Jason has been soliciting large-scale $$ to operate it. And TechCrunch 50 with all the $$$ flowing in. To suggest that big, successful Angel groups can exist just upon the largesse of their founders, is to defy reality.

    • I've never asserted that large scale angel groups can exist without funding. I just don't believe their funding should come from entrepreneurs. This is a deeply held belief of mine.

      I believe the angel investors and any sponsors (almost always service providers interested in access to both the entrepreneurs and the angels) should underwrite these organizations and events. The members of K4 should pay, not the entrepreneurs.

  • But at TechCrunch 50, in Jason and Mike's startup area with the tables, they are charging startups $1,500 for each staffer ("seat"), to be able to pitch (70-80% of attenedees are investors) for investment.

    The TechCrunch 50 event is the ultimate "pay to play" event. They make more profit off of startups, than the Keiretsu Forum every even though of. Each startup employee that sets foot in the area where startups have a table, has no other task but to pitch investors, after paying $1,500 per seat. That is the ultimate in "pay to play". So Jason is an extraordinairy hypocrite for critizing "pay to play" since he makes millions off of startups paying to play at TechCrunch 50. He is taking advantage of startup companies for his own profit.

    What about TechStars taking a HUGE equity percentage from early-stage startups, and making a killing off of it. You don't charge them cash on the front-end, but you are making a fortune off of these kids from the winners. How does that make TechStars better than the Keiretsu Forum???

    • I'm not going to try to analyze TechCrunch 50 because I'm not involved in it. I also know that Mike and Jason have split up and Jason is no longer involved while Mike is now doing TechCrunch Disrupt, which is an extremely high quality event that covers a wide range of activity, including giving many entrepreneurs access to a wide range of entrepreneurs.

      Regarding TechStars, having talked to you about this, I'm kind of appalled at your misrepresentation. We actually INVEST in the companies – TechStars provides $12k to $18k for 6% of common stock for each company. We then put them through an intensive 90 day program that has been well documented and well publicized. The statement that “we are making a fortune off of these kids from the winners” is deeply offensive to me – I encourage you to talk to each and every TechStars founder, including the ones that have exited, and as them if “we are making a fortune off of the kids from the winners.”

  • deleted3227518

    Hi Brad, from a presenter perspective at OAF Boulder, it was an awesome event. David gave us great insights prior to the event, we presented our story quickly and had ample time after to drill down further with interested individuals that came with great questions and important things for us to consider. I sent a note to David and Jason, but wanted to put a quick note out here as it is the participation from you and the other active investors that keep this moving forward (and keep us on our game with great questions!). Cheers, Pete and the Rapid.IO team!

    • Thanks Pete – it was great to meet you and see what y'all are up to. I'm glad the event was useful for you.

  • StartupTrekTV

    Brad, you make a good point and in theory, at least, i agree with you. We are on the same page with regard to that.

    As a former member of the Keiretsu Forum (K4), i can tell you with absolute certainty that (at least in Northern California) the members *DO* in fact, pay. $3,000 per year, for membership to fund operations. The startups also pay a modest fee ($1,500 per chapter) to present, after they are accepted to pitch.

    The K4 actually doesn't see many "concept stage" businesses – they are mostly profitable, growing concerns that pitch the member Angels, instead of seeking a bank loan, in order to expand operations. They don't fit the VC model.

    I never attended the former K4 chapter in Boulder, and have no idea how it contrasts with the vibrant, active chapters in Northern California, and the Pacific Northwest. My experiences with the K4, and all of it's terrific members, are limited to the chapter in Silicon Valley (Mountain View), the East Bay (San Ramon), and in Seattle+Bellevue, WA. Those are really great groups. I don't claim to know anything about the other 14 chapters, as i have no personal experience with them.

    The root of this problem is that Jason launched the OAF as a "Holy War" against the K4, claiming they are terribly scummy people, ripping off startups. That is so far from the truth. I know you are a very thoughtful person, and likely don't feel the same way. I doubt you would take a radical position like that, without knowing more about the K4 and all the good work they do for entrepreneurs. I tried to get Jason to attend a K4 meeting, but he ridiculed my invitation, and clearly knows nothing about them.

    I apologize for even bringing up your great TechStars operation, which I am definitely a fan of. That was a bit of a cheap shot on my part.

    I will avoid commenting on the OAF or the K4 in the future, as it is a bit of a hot-button issue for me.

  • StartupTrekTV

    Yes, I know that Jason and Mike split up, after that fight at the last TechCrunch 50. They are colorful people who provide a lot of entertainment to the Tech community.

    I regret my "heat of the moment" comment about TechStars. That was out of line, and I would like to retract that cheap shot.

    There is nothing at all wrong with TechStars. You, David, Andy (et al) are making dreams possible for young entrepreneurial teams that would otherwise, have to go work in the coal mines.

    I have interviewed several of those teams, and am happy to see that so many great things are coming for them, thanks to the TechStars program.


    -steve b.