The Angelsoft Blog - Latest Comments in Why do we charge $250?

Re: Why do we charge $250?

Jeff — Mon, 18 May 2009 11:29:11 -0000

How much on average do funded companies spend on this promotion tool? Could you put up statistics - I think they will speak for themselves.

For example, I'm considering this, but I think we'll need to have a $500-$1000 budget to get our plan posted long enough to develop a reasonable investor pipeline on which to judge this feature of your site. But I think if you showed that e.g. 50% of the companies raised 50% of their funding from this investment, more people might be willing to advertise their deal on your site.

Also, a cash back promise or payment for number of investor deals could work. For example, for every investor that views my deal and provides feedback, I'd pay e.g. $10-25. I'm guessing this is where you make most of your money, but if your system is as powerful as you say, a model where you're more aligned with bringing together investors with entrepreneurs would create more value for everyone.

Re: Why do we charge $250?

Michael Hahl — Fri, 06 Mar 2009 09:56:42 -0000

Dear Angelsoft,

I find your fee offensive, especially in these times. My partner and I have already spent over 500K on our business. The sad part is that some of that money has been wasted on black-hole financial groups like yours. They all had fees anywhere from $500 to thousands of dollars and just like AngelSoft, they called them filters or Good-faith fees.

Well after Madoff, Stanford, the entire mortgage industry taking us all for a ride, one would think that AngelSoft and Angel Investors would finally get it. But I guess not. It makes very little sense for you to be charging the people at the bottom of this food chain for "empty fees".

The real problem is that all of these groups, including Angelsoft, don't make any commitments as a quid pro quo for the fee. You don't promise anything other than posting my business plan in a database - WOW. How about a commitment for three genuine reviews of my plan by Investors typically interested in my industry along with one "face-to-face" meeting.

If you want us to "put skin in the game" and separate the men from the boys - how about you doing the same?

Mike Hahl
President
Ready For Golf, Inc.
772-215-3426
mhahl@RU-ReadyForGolf.com

Re: Why do we charge $250?

mcj1969 — Wed, 04 Mar 2009 18:36:28 -0000

I made it down 6-7 comments, then scrolled down to the last handfull only to find out people were still whining about $250. The thought of simply being ahead of them has confirmed my decision to join.... $250 is a small price to pay for a chance to HAVE VC's REACH YOU!!!

Watch for >>> WIDCASTER.net <<< this week, or reach me once I'm registerd at mcj1969@hotmail.com.

Re: Why do we charge $250?

gambling — Fri, 13 Feb 2009 03:03:09 -0000

Obviously, the payment is a good idea. Those with a solid submission will get considered quickly, and those reviewing the submissions won't have to weed through pathetic ones.

Re: Why do we charge $250?

maxwell — Tue, 03 Feb 2009 05:30:27 -0000

My name is maxwell chakaringa and my email is compguidezim@yahoo.com i am looking for a partner to enter into project which is very profitable in my country right now. The project is to produce pavers and cement bricks. The whole project needs only USD 25 000 to kick start and the returns are not believable. The details can be provide upon request. This size of money is not much to what you have . In Africa thus a lot of money and the project are always lucrative. Please communicate for more details

Re: Why do we charge $250?

Lorenzo J. — Sat, 24 Jan 2009 14:03:19 -0000

From the discussion $250 a month is really high.

Have you at Angelsoft thought about providing a discount for purchasing multiple months? If you left a monthly subscription at $250, but 3 months at $600, that is only a 20% discount. True, 20% seems high, but it is only 5% higher than 15% (average discount) and the thought of receiving the third month for only $50.00 seems really appealing.

In my opinion (and only my opinion) 3 months is ample enough time to find an investor through the site. If anything, it is enough time for them to review you project, contact the entrepreneur, and to exchange contact information.

As for the investors, I agree with bill. This is a service that they are using to produce “Income for them”. I think there should be a service charge. Simple put, charge the people who can afford.

Again,
Disclaimer: This is just my opinion. All advice may be flawed

Re: Why do we charge $250?

Bill — Sun, 18 Jan 2009 16:45:18 -0000

As an inventor (and just scanned this site for about a minute) I can definitely relate to what a lot of the entrepreneurs are saying, $250 can be another gamble especially when the statistics of getting investment through the five stages are 1:20. So if what Evan is saying, "Angelsoft is PRIMARILY a deal flow management tool for investors." - why not charge the investors who are reaping the benefit by increased productivity and commoditizing the investment process?

Re: Why do we charge $250?

evbart — Thu, 15 Jan 2009 15:44:53 -0000

Great comments Christian, but what you have to remember is Angelsoft is PRIMARILY a deal flow management tool for investors.

My full time job the past two years hear at Angelsoft has been selling the deal flow platform to VCs and angel investors, and I was sent out to launch our west coast presence in San Francisco, because there are so many investors out here.

When you have to manage 100s incoming deals via email or personal contacts, and thousands of due diligence documents and discussions, it can be a HUGE pain. Not having a process is part of the reason that so many investors have to completely close themselves off to the outside world, or they'll be crushed by the dealflow!

Angelsoft is the only piece of software out there built exclusively to help them solve this problem, so its something that many investors rely on every day to manage the deals they are reviewing. You can see stats on this investor activity here: http://angelsoft.net/indust...

To get a sneak peak at what they see, you can check out these tutorial videos I just posted to help new investors get up to speed faster:

http://angelsoft.net/blog/2...

Re: Why do we charge $250?

Lorenzo J. — Thu, 15 Jan 2009 15:41:29 -0000

Sorry,that is completely

Re: Why do we charge $250?

Lorenzo J. — Wed, 14 Jan 2009 18:16:31 -0000

I have to both agree and disagree with you Gene and Christian. I do believe that it is about the person more than the idea. Of course an investor will not give out $500,000+ to a coke head with a good idea to spend $499,000 on nose toys and that very few ideas get funding. Angelsoft does ask the questions that make you will see flaws in you concept.

But if you go through the discussion you will notice that the only people saying "that if you can't afford the $250 you are not ready" are the people that can afford it. Most people good or bad, do not have the $250 a month to pay. That to them is a light bill, day care payment for "1 week", or other necessay payment.

I am not say that Angelsoft is not a usful tool. If I had to vote I would vote it as the most usful to any other website or tool I have seen.

I would recommend the $250 here before anywhere else, but honestly, I do not think that 30 days is enough time to have investors look over, review with collegues and submit a serious inquiry about your business.

My apps I have submitted took about 3 weeks to hear a no with investors looking at it about once a week.

Maybe 3 months. And that is the problem! The $750 total.!!

Disclaimer: That is completing my opinion.

Re: Why do we charge $250?

Christian — Sun, 11 Jan 2009 08:14:44 -0000

Gene,

You are right - it's not abou the 250.-. The application process is helpful. I doubt it will give me more insight about myself though. Can you give us a more detailed insight how the world looks like on the other side of the fence? Which other services do you use and why do you use Anglesoft?

So far I subscribed to two services and all I got back was crap - serious. And this is not because my business idea is not interesting enough. I don't think that Investors really use services like Angelsoft. They are lurking around the local University or talk to their privat network. It must be hard for an investor to find the right business to invest and it must be utterly frustrating for investors to screen through the rubbish that is out there and find something with real potential. Do I hit the nail on the head, what do you think?

Re: Why do we charge $250?

Gene Guarino, CFP — Fri, 09 Jan 2009 05:20:37 -0000

I have been an entreprenuer my entire adult life.
I have had 14 businesses over the past 30+ years.
Over the past 4 years I have also been an Angel Investor myself.
I now coach entreprenuers through this same process of presenting themselves properly to potential investors. I love the process. It is a challenge and can also be a lot of fun.

Here is a secret.
It is all in the presentation. Do it right and you have a chance. Without that you have very little chance of success, period. Just keeping it real here.

What the team at Angelsoft has put together is an incredible bargain from my perspective and experience. After reading all of the comments above I think many are missing the true value of this service.

The true value is what you will learn about yourself and your business or idea by going through the process of applying for funding. When you go through this process and apply for funding through Angelsoft or another resource, you will discover valuable information guaranteed. In fact it may force you to realize that you are not ready or not willing to do what it takes or that your idea really is not as "special" as you think it is. That may sound a little harsh but it is the reality.

If that is what you find out, so be it. Better to find out in 30 days than in 3 years.
Much better to find that out for $250 instead of $250,000.
Think about it for a moment. If $250 is too much for you to invest in this process than why do you believe an investor would want to invest 100 or 1,000 times that in you?

Here is another secret for you.
As an investor the most important factor in my investment decision is the people involved and not the idea or the business itself. Some times I find a great "person" but the business is not a good for whatever reason. That may lead to something completely different than what you ever imagined. And it may have nothing to do with your current business or idea. It may lead to the investor saying I will give you as much as you want for a whole other business or idea. You have the ask yourself, are you someone that you would invest $500,000 in? Not your idea or your business, you personally.

That is the question the investor is asking themselves about you. If you can't answer absoulutely YES, than you NEED to invest what ever it takes as fast as you can to get that answer. If you can't convince yourself there is no way you will convince the person with the check book either. I believe when you go through the process you will have the answer and you will be better prepared to present yourself to an investor regardless.

Now lets get real.
Since you know in advance that only 1-2% of the applications get funding, what are you going to do to stand out and present yourself properly? If you do not get funding it will probably not be because your business idea wasn't good enough. A truly unique and or profitable business, service or idea will get funded. That is 1%. If you are absolutely convinced yourself, you now have a shot at the other 1% because you will not stop until you get the funding you need if you truly have what it takes.

The reality is there are a lot of great businesses that fail and products that never see the light of day because of the people involved. If you do not get the funding you are looking for it will be all about you. Ouch.

I want to encourage you to take responsibility for that and invest in yourself. Continue the process of becoming the "person" that you want to become. Give yourself every opportunity to learn and grow.
I hope this was helpful to someone here.
Feel free to respond or if you'd like to talk more offline just let me know.

Gene

Re: Why do we charge $250?

Jschwa — Mon, 29 Dec 2008 19:27:22 -0000

CristalS,

That is a great product request and one we will look into. For now, the Investor Community is less than a year old. We don't know exactly when those down times will be. In the future we will have a much better sense of things and will be able to provide more feedback. Thank you for your support, I'm glad you found the tools useful!

Re: Why do we charge $250?

Jschwa — Mon, 29 Dec 2008 19:25:25 -0000

Sabrina,

Many companies have found that 30 days is sufficient to attract attention and get into further talks with investors. Other have extended their application for a number of months. Views and ratings on a deal are cumulative, so this tends to push their deal further up the page when Investors sort by Most Viewed or Highest Rated.

Re: Why do we charge $250?

Robb Aleman — Mon, 29 Dec 2008 17:17:18 -0000

As I recall, stats show that 80% of business fail in the first 3-5 years due lack of capital or lack of experience (or both, I imagine). In the cases of lack of capital, I wonder what percentage of those businesses were lacking because it came from scrounging the meager resources of themselves and family and friends. I wonder how many of those business would have actually succeeded if they were given a loan or an investment. I understand there's only so much money to go around, and some business plans are so poor that no amount of money will make them succeed, but I wonder if this reality of getting funds skews the stats in a sense.

Re: Why do we charge $250?

Robb Aleman — Mon, 29 Dec 2008 14:48:53 -0000

Amen!

Re: Why do we charge $250?

CristalS — Wed, 24 Dec 2008 04:28:40 -0000

I think it would also be great to know what times of the year are not the most efficient to use the 30 day service. It seems that all the local groups are shutdown for the holidays, but does that mean they aren't sneaking onto their computers in the wee hours to go fishing at Angelsoft? Or is the activity higher during these times since their other obligations are on hold?
So, if activity slows during certain times for about 14 days+ perhaps a little time extension for the price would be enticing. Just a thought
I think the $250 is more than reasonable. The tools & connections provided here for entrepreneurs and the fact that the company really has sold itself to my local groups in Northern California to the point where they won't even accept applications from anywhere else, shows the commitment of the company to benefit both sides of this venture.

Re: Why do we charge $250?

Sabrina — Fri, 12 Dec 2008 17:00:51 -0000

I guess I'm doubting the fact that an investor will find us in 30 days. It seems to take much longer ~

Re: Why do we charge $250?

Sabrina — Fri, 12 Dec 2008 16:48:19 -0000

I understand a fee, but $250/month seems high. I would go through the process if it was $250 for 6 months!

Re: Why do we charge $250?

Lorenzo J — Sat, 06 Dec 2008 11:58:49 -0000

Yes, I apologize for that, I was confusing the application submissions with the investor's community.

I still said that this is the best community, that I have found, on the web.

With a better understanding the $250 is worth it. $250 for anything a month is expensive, but the value is what makes it worth it.

Re: Why do we charge $250?

Lorenzo J — Sat, 06 Dec 2008 11:36:38 -0000

Depends on the Investor. I have seen some investors that will invest in that amount, but I have seen more serious investors say, "Don't sell yourself short"!

Investors want to make sure your product is successful so they "will" get their return. You have to factor in advertising cost, working expenses, etc, etc. If you can do everything to be successful go with $65K, I say go for it. If not, calculate all your expense you need to be successful for 3-5 years and go big.

True, asking for $550,000 will be harder to get capital wise, but $65,000 is harder to get based on the above reason.

FYI, I have worked at a small business incubator and closely with many small business owners. One of the biggest reasons they fail is exposure. If no one knows about your product, no one can buy it. At a minimum, I would encourge you to factor in advertising. And you are looking at about $7500-$25K a year per publication for advertising, depending on how often they run.

Re: Why do we charge $250?

Lorenzo J — Sat, 06 Dec 2008 10:57:21 -0000

After further reading and understanding, I admit, I misunderstood the concept behind the $250. I thought the $250 was for Angelsoft to post your application to the investors. Which it will only let you post 3 at a time.

As for it posting your application to the investor community of 14,000, based on all of the dozen of other websites I have seen. It is most definitely in an entrepreneur's best interest to do it.

About the starting up with $250,000 as me and other owners state. Some of us do not have family and friends with $250,000 to borrow. I am on $30K annual income with a $1200 mortgage and $1300 in daycare for my kids. I have withdrawn from my 401K, taken a loan and maxed out my credit cards and still only came to about $15,000.
It is very upseting with the more wealthy people saying we aren't ready for investing because we do not have cash on hand of over $250,000. Maybe for those who haven't put in a penny, but there are those who just don't have access to the capital.

I know you didn't necessary come out and say that, but I have notice that is a theme here .

Re: Why do we charge $250?

kprasob — Thu, 04 Dec 2008 05:30:45 -0000

I am seriously looking for an investor for a small amount of around US$65,000 for a start up business. Is that too small an amount?

Re: Why do we charge $250?

evbart — Wed, 03 Dec 2008 14:47:13 -0000

Great discussion going on here, glad to see so many entrepreneurs with so many questions.

I do business development on the investor side as well, just like Ryan, but I'm based in San Francisco, so I focus on the west coast investors.

Keep the questions coming, and we'll do our best to clear up any confusion!

Re: Why do we charge $250?

Ripkin — Wed, 03 Dec 2008 14:41:34 -0000

Bill,

To address Lorenzo's assertion, the average number of investors who see a posting in a month is closer to 40 or 50. Lorenzo is also mistaken about only connecting to 3 investors at a time. You may connect directly to any 3 GROUPS at a time by submitting your application directly to them through their website. Groups on Angelsoft averagely consist of 40 accredited investors, so it follows that you connect directly to around 120 angels at a time without ever submitting to OPENdeals and paying 250. After 3 direct submissions, you may apply directly to additional groups, but we simply tag your project to indicate that you have submitted on "bulk" to more than 3 groups. If you want the broader exposure that OPENdeals offers, pay us 250 and we promote your deal visibly to every group, and every member of every group. That's 380 angel groups, 45 VCs, and incubators, seed funds, and economic development groups around the world who trust in Angelsoft and represent over 14,000 accredited investors. This is very important to understand if you are seriously looking to fund your project, and utilize our website to do so.

Back in June we posted a blog about the average number of investors to view an OPENdeal posting per month. Back then, a deal with a video was receiving on average 22 views, a deal without a video 13 views, and 21% of all OPENdeals were introduced by a investor to his angel group for serious consideration by the members. Since then due to our efforts to promote OPENdeals, we have more than doubled these numbers, and we will publish more recent data soon.

You can find the old blog post at: http://blog.angelsoft.net/2...

My job in business development is to communicate directly with our angel groups and VCs. I sell new groups on the benefits of adopting our platform and I sell my existing groups on the benefits of OPENdeals. We do everything we can to promote OPENdeals to our investment groups, so these numbers are continually growing.

Unfortunately, as hard as we try to collect data and statistics, we still do not have an accurate number of individual investors who invest (especially not on a per month basis). We are also obliged by our privacy policy to never disclose, "what investors invested in what projects." This data is difficult to capture because there is no way for us to require investors to give us this information. A lot of their work including investment is inevitably done through in person contact with entrepreneurs. They may never enter investment data into Angelsoft. We are working to provide investors compelling reasons to give us their investment data, such as reports and portfolio tracking, but it's still optional for them.

Based on 40 of our angel groups who DO track all their data and investment information through our tool, we know that between 1 and 2 percent of all inquiries get funded, the average investment amount from a single angel is 25,000 USD, and the average investment amount in a particular project is between .5 and 1 million USD.

Investments are not made in a single month, nor typically in two or even three months, but after many months of collaborative due diligence and negotiation. Finding the right investors and getting funded is never a simple process. Angelsoft is here to make the process more liquid and as transparent as possible.

Thanks for recognizing that we must pay for the cost of our operation. We think 250 dollars is perfectly reasonable. For 250, you benefit from 4 years of effort in building software, cold calling angel groups and selling them to adopt our system, building trust in the industry, listening to their (often negative) feedback, and creating a tool that the majority of the angel investors in the world absolutely love to use. It wasn't easy for us to get where we are, and 250 is a small price to pay.

Ryan Pipkin
Senior Account Executive
Angelsoft