The Wisconsin Early Stage Symposium put out a call for startup companies to make pitches. I need to explain why I haven’t been spreading the word.
On the surface, pitching at the Early Stage Symposium is a no-brainer. The Wisconsin Technology Council says its conference, which will be in Madison Nov. 7 to 8, should attract more than 600 attendees. Most of the state’s angel and venture investors will likely be there.
But here’s my problem: Startups have to pay.
To be considered to pitch, startups have to register to attend the conference: $179 for a startup’s first attendee and $129 for each additional team member, according to the Early Stage Symposium’s fee schedule.
Startups are the scarce resource, the crown jewel of any ecosystem; they’re the organizations that are taking the most, in fact an inordinate amount of, risk. The way we see it at Milwaukee Institute, we need to give these risk-takers as much support as possible.
That’s why our inaugural Midwest TechConnect event within Milwaukee Maker Faire charged corporations for booths but gave startups their booths for free. Northwestern Mutual Life Insurance Co., the event’s presenting sponsor, and Betty Brinn Labs, which produces Milwaukee Maker Faire, were on the same page with us.
The Tech Council, formed in 2001, has scored its share of wins for the ecosystem, the biggest of which is probably its leadership on the Qualified New Business Venture tax credits that started in 2005 for investors in Wisconsin startups.
I understand that organizations have to make money. But the Tech Council receives $310,000 annually from the State of Wisconsin, in part to fund its efforts to increase seed and early-stage financing for startups. Should the nonprofit organization also be collecting money from startups for doing this work?
The Tech Council’s large board of directors – it has nearly 50 members – is a Who’s Who of people involved in the Wisconsin startup scene. Why are they supporting the practice of making startups pay to pitch?
The Tech Council says startups not chosen to pitch can get a refund if they don’t attend the Symposium. Why not open applications to all startups, whether they want to attend the conference or not? I bet that would result in a higher-quality pitch event.
There are lots of other pitch events in Wisconsin. Bridge to Cures’ Healthcare Innovation Pitch, Capital Entrepreneurs’ Startup Showcase, gener8tor’s OnRamp conferences, the Greater Madison Chamber of Commerce’s Pressure Chamber, Golden Angels Investors’ AgTech Venture Day, and Startup Milwaukee’s Emerge, as well as pitch events in 12 cities during its Startup Wisconsin Week, to name a few.
None of them charge startups to pitch – or to attend, for that matter. If anyone pays, it’s sponsors, investors, big corporations and/or service providers.
The “pay to pitch” controversy is not unique to Wisconsin. There’s a national discussion, anchored by a well-known blog written in 2009 by Jason Calacanis, an entrepreneur and angel investor. Rich people (specifically, angel investors) shouldn’t be charging poor people (“startup entrepreneurs desperate for cash to fuel their dreams”) to hear their pitches, Calacanis says. From an economic perspective, the Tech Council and the State of Wisconsin seem more similar to angel investors than startups.
The Tech Council isn’t the only organization in the country charging startups to pitch. The Keiretsu Forum, a California-based angel network, has sparked controversy because it charges startups thousands of dollars to pitch to its members. The Houston Angel Network, one of the country’s most active, used to charge, but several years ago stopped requiring startups to pay to pitch its members. And guess what? More applications came in.
Every dollar startups spend to participate in pitches is one less dollar they spend growing their businesses. Startups are critical to a healthy ecosystem; we need to treat them well. One way to do that is to put them in front of potential investors without making them pay for it.