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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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Nice Move By Funding Universe

Comments (46)

A few weeks ago I wrote a post titled An Angel Investor Group Move That Makes Me VomitIn the post, I lambasted the practice of charging entrepreneurs to pitch to an angel group for funding.  I think this is completely backwards – the angel group members should cover all the costs and the entrepreneurs should not be charged.

Last week David Cohen (the founder of TechStars) wrote a post titled An offer to Funding Universe.  On 9/30, Funding Universe is having one of their CrowdPitch events in Denver.  The were originally charging $125 to present – David welcomed Funding Universe to Colorado and offered to pay the presentation fees for half the companies if Funding Universe covered the other half.

Funding Universe responded to David’s offer by having the Pitching Fee Removed!  Nice job guys.

  • http://twitter.com/stevenkane @stevenkane

    we should never underestimate the cleansing

  • http://twitter.com/stevenkane @stevenkane

    we should never underestimate the cleansing healing power of shame

    (not sure why but first attempt lost half the comment)

  • http://intensedebate.com/people/bradleyjoyce Bradley Joyce

    very cool to see you guys pushing this and having some affect. Some of the angel groups down here in north texas charge upwards of $500 to get in front of their members! I understand the whole idea of weeding out people who may not be ready to pitch yet, but there are other ways of doing that that are more constructive to the whole community.

    Hope to see these ideas spread!

  • Jon Prescott

    They may have eliminated the fees for that event, but they still want to charge me a C note to "evaluate my application" for their web based services. Clearly this this is a business, not an angel group.

    • john

      after they evaluate then they charge you upwards of 1500 bucks to fix problems after the evaluation. Only a business looking to rip people away from their money

  • http://intensedebate.com/people/AlMan32 AlMan32

    I am familiar with funding universe from participating in the juntopartners program in summer of 06. I too thought it was odd that funding universe was charging startups a fee to present to investors. With the change in charges, maybe funding universe needs to look at their business model for producing revenues!!

  • http://spellspace.com tess

    Please beware, though Funding Universe stopped charging this one time for their event, apparently they are a scam. http://www.complaintsboard.com/complaints/unsecur

    I registered on their website and within minutes they called me to charge me $99 to connect me with investors. I only registered because of Brad's post, but I am canceling my membership now.

    • http://intensedebate.com/people/bfeld Brad Feld

      If this is what they are doing, it’s really bogus.  My understanding was they were waiving the fees to pitch.  If this is a requirement, then I got scammed also.

    • http://intensedebate.com/people/dgcohen David G. Cohen

      Tess – the URL you posted seems unrelated to Funding Universe. It's for something called UnsecuredLine.com. Did you post the wrong link?

      I've asked the guys from Funding Universe to comment on their entire model/process here. Hopefully they'll comment here soon.

      • http://spellspace.com tess

        It's the correct link, scroll down a little and there are a couple of posts specifically about Funding Universe…..
        "Business owner and aspiring business owner, be aware of this company RBSL group (fundinguniverse.com). They are a complete fraud.
        They claim will help you to secure financing to your business but what they truly want is your money. Their strategy work like this:
        First they convince you to pay $329 and they promise you they will help you to secure financing within two weeks. Then you receive a call within
        two days and they convince you to pay $2500.00 to get your profily in optimal condition for financing. Then they advised you that they will produce and
        optimizer report and be delivery to you within 3 business day. Within 3 days you will receive an email advising you the report is done. In that email
        you will receive another advised to contact a law firm provided to you by them and that you will receive a discount of $250, if you allow then to help you
        with your credit history. At that point I knew I was dealing with an unethical company. Please follow my advise and do not make the same mistake I did. Once they
        get your personal ATM, they will charge your card without your autorization. I already opened a complain with my personal bank, too. Please read and learn from my mistake.
        Stay away from RBSL Group (fundinguniverse.com)"

        Maybe they are offering a legitimate service, but they charge a lot of fees.

        • http://www.fundinguniveres.com Alex

          Tess,

          Again, as Brock already mentioned, we would be happy to speak with you in person instead of long blog comments back and forth. We work with 5,000 – 10,000 businesses a month all around the USA and have gotten our entrepreneurs over $30MM in funding so far in 2009. We are comfortable that we are doing our part to help, but it seems as though you have an agenda to paint us in a different light. I guess we could add the CrowdPitch fee back in if you'd like :)

          I'd welcome an in person meeting or phone call, your preference. My email is alex AT fundinguniverse.com – so please connect with me and we can go thru in detail what we do, how we do it, and then you can continue to say whatever you'd like about FundingUniverse after you we spend some time talking.

          In the meantime, a random comment about an affiliated debt partner of ours probably isn't the best way to characterize Funding Universe. The description, pricing and timelines described in that comment you quoted are inaccurate as well. But this is the internet, people post what they'd like, where they'd like, truthful or not. Often times competitors will post fake reviews, and other times we could be at fault. Servicing up to 10,000 businesses a month doesn't mean we won't tick some people off – I'd say we are not alone with regard to our occassional imperfection. But we have an excellent reputation that we are proud of. We have hundreds, maybe even thousands, of testimonials we can share.

          I look forward to hearing from you.

          Thanks,

          Alex

      • R R R

        Unsecuredline.com is now a part of Funding Universe

    • http://www.intensedebate.com/people/FundingUniverse FundingUniverse

      @Tess,

      Thanks for the comment — let me provide some light on the subject so that everyone knows how our model works.

      We work with a significant amount of small business owners from across the country (to the tune of 5,000-10,000/month) that are looking for some type of financing for their business. When the entrepreneur comes in the door, we consult each person to first determine what type of financing (debt vs. equity) is the most appropriate for that specific business model. Based on that initial conversation, we do a complete funding analysis to determine how “investable” or “bankable” the business is. On the debt/banking side, the initial analysis is $199 as it requires our team to both produce the report and covers the hard costs to pull both personal and business credit reports. On the equity side, the initial analysis is only $99 because we are paying our due diligence team to review your business plan, financial model, and investor presentation (this was the $99 that you refer to in your comments).

      Based on that analysis, that really determines the next step. In the case where the business is “bankable,” we can then take them through our “Path to Financing” program and put him/her in touch with the bank that fits your business the best (each bank has different lending products that they push – which means that it’s not just about going to your local bank to get a loan). In the case where the business is “investable,” we look to get that business owner in front of as many investors as possible (through our Speedpitching http://www.youtube.com/watch?v=8Onwi0IR9jw & CrowdPitching http://www.fundinguniverse.com/services/339/483/d… events, website, email intros, etc.).

      In some cases, the funding analysis tells us that business is not currently “bankable” or “investable.” In such cases, we offer to help them improve their current position through our personalized consulting process. Each package is customized to that business owner to help them through the difficult process of raising capital and/or getting bank financing.

      When we say that our pitching events are free – does that mean that we will turn into a non-profit and remove all of our fees? Of course not – we would quickly be out of business. But, for those that want to participate in our CrowdPitch events, that can apply and participate (without going through any of our other process) without paying a dime.

      While our model may not be perfect (who’s is?), we sincerely care about each entrepreneur and are doing all that we can to help them through the world of small business funding. In fact, over the past 10 days alone (since 9/18/2009), we’ve helped around 43+ businesses obtain over $367,500 in small business financing (and those are just the ones that we know about – there are countless other deals that happen on a regular basis that don’t get reported). As you can tell, we are making a significant impact on the world of entrepreneurship/small business — especially in one of the worst economies in years!

      I hope that this adds some well-needed light to the subject. If anyone has any specific questions or comments or would like to find out more details, feel free to contact me at bblake “at” fundinguniverse.com.

      Thanks,

      Brock Blake
      CEO
      FundingUniverse

    • http://www.intensedebate.com/people/FundingUniverse FundingUniverse

      @Tess,

      Thanks for the comment — let me provide some light on the subject so that everyone knows how our model works.

      We work with a significant amount of small business owners from across the country (to the tune of 5,000-10,000/month) that are looking for some type of financing for their business. When the entrepreneur comes in the door, we consult each person to first determine what type of financing (debt vs. equity) is the most appropriate for that specific business model. Based on that initial conversation, we do a complete funding analysis to determine how “investable” or “bankable” the business is. On the debt/banking side, the initial analysis is $199 as it requires our team to both produce the report and covers the hard costs to pull both personal and business credit reports. On the equity side, the initial analysis is only $99 because we are paying our due diligence team to review your business plan, financial model, and investor presentation (this was the $99 that you refer to in your comments).

      Based on that analysis, that really determines the next step. In the case where the business is “bankable,” we can then take them through our “Path to Financing” program and put him/her in touch with the bank that fits your business the best (each bank has different lending products that they push – which means that it’s not just about going to your local bank to get a loan). In the case where the business is “investable,” we look to get that business owner in front of as many investors as possible (through our Speedpitching & CrowdPitching events, website, email intros, etc.).

      In some cases, the funding analysis tells us that business is not currently “bankable” or “investable.” In such cases, we offer to help them improve their current position through our personalized consulting process. Each package is customized to that business owner to help them through the difficult process of raising capital and/or getting bank financing.

      When we say that our pitching events are free – does that mean that we will turn into a non-profit and remove all of our fees? Of course not – we would quickly be out of business. But, for those that want to participate in our CrowdPitch events, they can apply and participate (without going through any of our other process) without paying a dime.

      While our model may not be perfect (who’s is?), we sincerely care about each entrepreneur and are doing all that we can to help them through the world of small business funding. In fact, over the past 10 days alone (since 9/18/2009), we’ve helped around 43 businesses obtain over $367,500 in small business financing (and those are just the ones that we know about – there are countless other deals that happen on a regular basis that don’t get reported). As you can tell, we are making a significant impact on the world of entrepreneurship/small business — especially in one of the worst economies in years!

      I hope that this adds some well-needed light to the subject. If anyone has any specific questions or comments or would like to find out more details, feel free to contact me at bblake “at” fundinguniverse.com.

      Thanks,

      Brock Blake
      CEO
      FundingUniverse

      • John Chipman

        Brock, I am extremely frustrated with your company. chuck has failed to keep appointments and follow up, no one ever answers their phone, and I am going to seek restitution.
        John Chipman Sr 770-480-6485

      • Bob

        It's just a matter of time before your house cards is exposed for what it is (or isn't should I say). The victims you've defrauded will take some pleasure in seeing you and your minions in handcuffs being led by the F.B.I. to the U.S. Courthouse to face charges of conspiracy to commit mail fraud.

  • Kyle

    Well done Brad.

  • Randy Domolky

    You guys seem to be missing one of the critical issues which is that before your business can get any money from people you don't currently know, you will likely have to spend over $10,000 or even $100,000. So the concept of $125 or $500 to pitch investors is not a lot of money. The biggest issue with groups such as what is described in these posts is that you are not very likely to get money for strangers for your "idea". You need a business and before you have that you will need to talk to you friends and family and then your old boss or old client who can really appreciate what you are doing. It would seem that with thousand of businesses as clients for FundingUniverse, that is the issue. This company is capitalizing on the dreams of entrepreneurship. I have heard similar things about patent pitches to inventors. Once we are only talking about quality businesses and not hair brain ideas on a power point deck, there will be fewer issues about some modest admin fee which is not enough to matter anyway.

  • Pingback: Why it is Ok to Pay to Pitch | Andrew Hyde - Startups. Start Here.

  • Nancy

    Of course there is no perfect business model as there is not such thing as a perfect business. There is always a BUT in everything. The difference between a perfect business and a less perfect one is in their marketing techniques, so if your business is not perfect at least make sure it sounds like it is, and may may also believe it.
    Plus, when did any of you last heard of anything good that was also free? Even before money have been invented people would still charge services or properties instead, nothing has changed in between.
    I'm not saying that you have to pay lots of money in order to get good quality services, but you certainly can't have good quality for free.
    In case you are looking for venture capital for instance and you have several options you can always look at their special offers (for instance http://www.vcgate.com/orderonlinespecialprice.htm ).

  • Westwood

    Last week I paid Funding Unvierse $329 and promised to pay them 3% – 5% of funds they obtained for my business. Less than a week later they wanted another $2500 to proceed to the next step. Learn from my mistake, run from these scammers. If they were any good at what they promise then they would be willing to work for the back-end fees.

    • http://www.fundinguniverse.com FundingUniverse

      @Westwood,

      Thanks for the post. It sounds like you may have misunderstood our process. Let me clarify a few of the comments and add some light for the rest of the readers.

      This is exactly how our model works:

      1. We do an initial funding analysis for each person that comes in the door. This is what the $329 covered. Depending on the client, we'll look at the business plan, financial model, investor presentation, etc. to determine if the client is a good fit for an investor. In other cases, we look at personal credit, business credit, debt-to-income ratios, etc. to determine if the client is a good fit for a bank/lender.

      If the analysis shows that the client is bank/lender/investor-ready, then it's easy to push things through and match up the client with the investor/bank/lender. However, when the client isn't quite bank/lender/investor-ready, we want to help them better prepare to maximize their chances of success. Otherwise, the client would likely be declined.

      As a result…. here is what happens:

      2. We have a service to help the client get things "buttoned up" and improve their current preparation PRIOR to being matched up with the bank/investor/lender. The service is customized for each client depending on their current status and the price varies between $500-$3500 depending on how much work needs to be done. This service is completely optional – we can help the client to speed up the process, but it is in no way mandatory to move forward to the next step. The good news is that any fees paid to improve your preparedness will also be directly credited towards the 3-5% success fees.

      While we can't guarantee that every client that will obtain funding, we work exceptionally hard to increase your chances of success Our fees compare very favorably with other more expensive options for new startups. We are passionate about helping entrepreneurs and are always looking for ways to improve. We appreciate your input. Thus far, in 2009, we've helped thousands of entrepreneurs obtain approximately $40MM in funding and hope to grow that number considerably in 2010.

      @Westwood: we'd love to talk more about your specific situation to see if we can help. Let us know.

      Thanks!

      FundingUniverse
      members@fundinguniverse.com
      888.558.5751

      • Ray

        wow, now its $500. yup, i am one of those horror stories right here in UT. You took my hard earned "freedom" money and promised a valued service above and beyond what I had already paid for with another company but delivered obvious suggestions that any human being with a pulse would know before working with you guys, specifically a man named Joel. Your salesperson promised me that if you didn't deliver above and beyond what I already received through another company Funding Universe would refund me. Promise Unfulfilled. I even offered to let you keep $500 to pitch and refund me the rest of my $3k investment cause I did see the value in being able to pitch a group of investors but you guys were very rude and unwilling to comply with your supposed refund policy. I'm out a few thousand towards my dream but thankfully I worked my ass off last summer and funded it myself and hopefully this prevents anyone else from making the same mistake with this SCAM!!!

  • Consumerwatch

    Funding Universe (FU) is just another Trojan horse designed to hide the true nature of the same business model. PayOut One, RBSL and now Funding Universe are all run by the same people with few exceptions. They charge exorbitant fees for little or nothing and something that you could do on your own. They run your credit through Advantage Credit located in Colorado. The cost for a credit report is about 15.00. They then "create" a credit profile and charge 350.00+/- for something you could get from several internet credit sites for free. Check out http://www.ripoffreport.com for information about RBSL and Funding Universe. There are also other postings on complaintsboard.com, rbslsucks.com and several other sites. Before you get in bed with these guys, do your homework or you will get burned.

    • Ask Joel

      yup, i am one of those horror stories right here in UT. They took my money and promised a valued service above and beyond what I had already paid for with another company but delivered obvious suggestions that I was and any human being would know before working with them, specifically a man named Joel. Their salesperson promised me that if they didn't deliver above and beyond what I already received through another paid service they would refund me. Promise Unfulfilled. I even offered to let them keep $500 to pitch and refund me the rest cause I did see the value in being able to pitch a group of investors but they were very rude and unwilling to comply with their supposed refund policy. I'm out a few thousand but hopefully this prevents anyone else from making the same mistake with this SCAM!!!

  • Moronwatch

    For sure Ripoff Report is truly a legitimate source for information about companies(just view the links below)…why don't you try a reliable source like the attorney general's office…Do I get an A teacher?

    http://www.reportsripoff.com/ripoffreportscam.php

    http://www.ezripofflawsuit.com/

  • Jeremy

    I personally worked with FundingUniverse earlier this year. I can speak first hand of the many advantages of using FundingUniverse. Especially in the early round /Angel funding. Their network of expert mentors and VC/Angel groups are just what a SERIOUS start-up company needs to get connections for more than just $. If you’re not willing to spend $300 bucks on your business/idea, neither will any investors. We were a start-up looking for 250K. I INVESTED well over $300 into my relationship with FundingUniverse. It was well worth every penny.

    I would recommend FundingUniverse to anyone who is SERIOUS about raising capital for their Start-up! Jeremy

  • Ray

    well, i am one of those horror stories right here in UT. They took my money and promised a valued service above and beyond what I had already paid for with another company but delivered obvious suggestions that I was and any human being would know before working with them, specifically a man named Joel. Their salesperson promised me that if they didn't deliver above and beyond what I already received through another paid service they would refund me. Promise Unfulfilled. I even offered to let them keep $500 to pitch and refund me the rest cause I did see the value in being able to pitch a group of investors but they were very rude and unwilling to comply with their supposed refund policy. I'm out a few thousand but thankfully I worked my ass off since then and funded my business myself, no thanks to funding universe scam artists! hopefully this prevents anyone else from making the same mistake with this SCAM!!! Glad I was able to help fund Funding Universe's business model and not my own.

  • Peter Edwards

    Jeremy, this is suspicious. What is a "SERIOUS" start-up? Do you know anyone who does it as a joke? I have been counseling companies for 32 years, had a securities license, and co-started a VC firm that raised nearly $300MM. People who offer to help you raise money for an up-front fee deserve great skepticism. My advice: find the best lawyer or accountant in your area with a reputation for dealing with startup companies. Join your local entrepreneur groups. Quit looking for a quick fix. Raising money is really hard work, and it's not enough merely to find people with money.

  • Rosemary

    WOW, I am so shock to see all the bad experiences, so far posted from Funding Universe. I was on the phone yesterday with one of their underwriters. I was first charged $ 99.00 up front a fee for the underwriter’s service. Then yesterday the underwriter wanted for some other services $2,700, this is for the creation of the “Business plan” and “Lender ready Analysis”. I told the Underwriter, I wanted to first discuss the Terms and Conditions with my husband.

  • Rosemary

    So, the under writer gave me 24 hours to look it over, if not happy I could cancel. I did however sign the digital signing. Which I regret, Now! But he told me I had 24 hours to cancel. I am trusting on his “word”. I called him and left him a message because my husband had a lot of question. The fees to start off, he felt are too high. Then the underwriter told me that he would lock in the loan fees at a 3%. The terms and conditions state from “3% to 5%”. Also, it states you cannot cancel. So, I do see some unethical behavior so far. I am calling them once I post this concern again. I see the terms and agreements have some information that was not expressed, when I spoke with the underwriter over the phone. .

  • Rosemary

    Thank God, my brother was on the other line and heard everything. I could agree with Mr. Tess. I also see they have many complaints via the BBB also. Yes, misunderstanding. That is just a defense the company uses. The work of the company is to make sure “we understand fully”. A happy consumer is one that will promote your business. An un happy consumer is one that will kill your business. I hope this is not a scam. I am presently unemployed for the last six months looking to open a business and need the funding. But, I cannot afford to give any company $2700. 00 of my saving just to “scam me". I will give them a call right now. I will keep you guys posted.

  • http://intensedebate.com/people/bfeld bfeld

    Keep us posted on how it turns out.

  • Rosemary

    Guys, as promised an update on my experience with Funding Universe. I must report my experience with Funding Universe was not anything near what you guys reported on this blog. I did stop the agreement with them. They did not withdraw any funds from my bank account. The underwriter who was handling my case, Mr. Jim treated me with the up most respect. He is very professional and very knowledgeable. He took the time to listen to all my questions and concerns. He had acceptable answers to all my questions.

  • Rosemary

    However, I had to stop the process because my husband is very old school, and refuses to pay the amount requested for the service. However, if it was up to me, I would pay for the service. They are providing a legit service. I did my research.
    Nothing in this world is free. You get on a bus, train, purchase food, go to a doctor, you have to pay. They are providing a service and steering you from beginning to end of the process. They are charging a fee.
    I also study many positive comments from consumers that obtained funding from them to open businesses. So with that said, I am sorry to here you guys had such bad experience with them. However, my experience went well. Good Luck, in your search for funding.

  • pierre

    maybe im wrong but i have never seen a legit/professional commment/reply on customer, or people opinion to try to defend themselves. i don't trust FundingUniverse, because of course other people comment on the complain link. and also minor things like bloging with people about trying to defend their company and their calls: left a message with no name just a number 801 545 7046 and saying you can also reply on the email they sent.. when you call that numer it don't sound like a professional business….

  • AM

    Unfortunately, I didn't see this site before I fell in the trap with funding universe. They seemed to be believable and I was in desparate need of a loan, but after 3 months of waiting with very little response from them, and my application was not even sent to the banks, I gave up and am now asking for a refund. These people are thieves, beware! I am in the process of filing a lawsuit against them unless they reimburse me for the $2500 they literally scammed

  • jacob

    this company is a scam , dont trust what this guy writes about , all that means is 10000 biz are out cold hard cash

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  • Pissed

    I too fell victim to Funding Universe. There has to be some way to get back the money that was put up to this scam company.

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