There has been quite a bit of excitement on the blogosphere and twitter with respect to Jason Calacanis’s crusade against angel groups charging entrepreneurs fees to pitch them (see, e.g., the discussion on Hacker News and this recent post). As a corporate attorney representing entrepreneurs, I generally agree in principle with Jason’s position; however, I think it is important to distinguish among the different angel groups and their respective practices.
Needless to say, to the extent an angel group (i) is not adequately disclosing their fees, (ii) is charging unreasonable fees and/or (iii) is deceiving entrepreneurs, it is a significant problem that needs to be addressed. On the other hand, (i) if the fees are reasonable/de minimis and are adequately disclosed and (ii) the angel group is providing a legitimate service to entrepreneurs, there may be compelling reasons to support such a fee-based service. Indeed, as discussed below, John Dilts (the founder and President of Maverick Angels, LLC) recently attempted to make that case to Frank Peters during his podcast interview on 9/24/09 here (referred to herein as the “Dilts Podcast”).
This post briefly (i) provides some background and context, (ii) sets forth the respective arguments made by Jason and John and (iii) concludes by recommending that they should meet face-to-face and have a live debate (in the great American tradition). (more…)