And now, some smoking guns (or “part two of angels that charge”)
calacanis.com
calacanis.com
We're going to have these people on this Friday's This Week in Startups at 1PM pacific. http://bit.ly/mW2zR
If you know anyone from Keiretsu Forum who had a GOOD or bad experience we're looking to have them on the show.
Enjoyed the post, keep it up.
The use of phrases such as "bogus forums" can readily be attacked, and (in my long experience in the law) it is precisely those who are most unscrupulous who are quickest to seize on technical points to try to bludgeon you in the courts. Does "bogus" connote fraudulent? Is there nothing at all of value that is being offered? Maybe not. But using this type of phrase puts the one who is otherwise exposing questionable practices in the position of potentially having to prove that the forums are nothing but frauds, which might be hard to prove.
Yes, free speech is involved but an attack on someone's manner of making a living sets one up for "libel per se" charges, which can be tough to fight. With the web as the forum, the claimant can also shop forums to find the most sympathetic court available.
I have fought fights like this before, and I know what they involve. They need to be fought in a way that is effective and not merely righteous. The latter is not bad but can be undermined if you give your opponent gratuitous ammunition with which to attack. It is my belief that the same fight can be waged at a slightly more philosophical level and remain completely effective. Therefore, the risks being taken by naming specific parties and using phrases such as "bogus forums" will only serve to weaken an otherwise compelling position being advanced by a strong proponent of a good cause.
At this point, whatever has been done has been done and the fight will proceed legally at the level just described. It will take a lot to fend off the vicious attacks to come. I wish the author well in his endeavor. He is on to something and I hope he can handle it effectively. The entrepreneurial community will certainly benefit from his efforts.
If you have a legal background, I think you might want to see if you can find precedents in the talent (modelling, acting, script-writing) fields.
We have spawned a new generation of idealism where profit is a side effect of actually giving a shit about our customers. What a concept.
This is something that is embedded in new york finance and business culture. You make connections and get rich by introducing people to one another and taking a cut for the privilege. Thus, investment banks are not really banks in the traditional sense of the word but are more like brokers that connect investors with people that need capital.
With the internet, this model will change and is changing. It is not that hard for people to connect and one does not need to pay hefty fees to do it. So the old cliché about the internet cutting out the middleman is actually slowly happening in the world of finance after it happened in the worlds of computer sales, book sales, automobile parts, music sales, etc.
I think intermediaries will still be important but they will have to bring more to the table than merely having a fat rolodex. They will probably have to be able to do much more filtering and the like. For example, I-banks can still make a lot of money if they are able to select good investments for their investors. But lately they have not done well in that department.
I'll be spreading the world through my channels.
I don't want anyone telling me how to price my company's products.
Pay per pitch is sleazy. But it's not illegal.
(not talking about the deceptive pay per pitch, that's a different story)
The issue here is the free market, and my email newsletter/blog are part of the "free market forces."
The testimonials from folks who felt ripped off, or worked at Keiretsu, are also free-market forces.
In fact, so is this thread.
so, don't worry about me telling them the price because they can ignore me!
Rock on.
If you really want to FIX this, offer up a viable structured alternative to aggressively pursue their business. It's easy to throw spit-balls from the back of the classroom. I'd expect much more from somebody who's been down that road--on both sides of the table.
Instead this whole affair comes across, in gestalt, as a series of public ad hominem attacks on other parties and a plea for personal attention in the minimus.
If your ambition is to be a "shock podcaster" and garner a Dave Winer-esque reputation, you're, sadly, headed down the right track. You complained about being publicly "berated" at Gnomedex '07. Kettle. Pot. Black.
Rephrasing this all another way, how can it be a bad thing for him to provide for information (even publishing testimonials) about these groups so that someone considering using such a group can make an informed decision? From the sounds of it, these groups seem to be rather slim on the details (other than price) when it comes to communicating with potential entrepreneurs. If these businesses are operating on the premise that they are going to somehow 'hide' what happens inside so that no one can know the inner workings until they pay the entrance fee, then they already have a failing business model.
Did you even read some of the personal stories? The one about paying $18k just to pitch to a room lacking all of the 'big names' that are touted out when it's time to convince you to pay the fee really irks me. If that is even true, how can someone even justify this kind of behavior?
Aside from the usual litany of trade-secret/defamation issues (largely paper tigers here) and clearly vested bias by the publisher, the release itself isn't the issue.
What IS wrong is the instant garnering of credibility of this single-sourced material without any fact-checking of these accounts nor dialog with/about the respective parties. Whistle-blowing is fine IF released through 3rd parties who apply independent due diligence.
To use an analogy, it's as if the coach of a college football team calls a press conference to expose the corrupt high school recruiting practices of a rival university.
If true, and the coach genuinely places the best interests of those high school students foremost, he insures its release through ESPN, the college athletics association, or any 3rd party perceived to be reasonably neutral.
If, on the other hand, he personally brings forth these allegations in his own forum, it only serves to degrade their credibility, do a disservice to those whom ostensibly he is attempting to serve, and cast a great deal of umbrage on his true motivations.
One final addendum, if that $18k story is true, then it sure looks like an open and shut case for a breach of contract suit, but more likely, an easy opportunity to reach a pre-trial settlement for the majority of the proceeds.
If the founders blindly paid these fees w/o any sort of written agreements of performance on the part of the Angel firm, nor applied any inverse due-diligence to their potential investors, then I seriously question if they have necessary modicum of business acumen to run a company.
As I've already stated, from what's been published, I disagree with these practices, but we're only hearing "leaked documents" from ONE SOURCE. There's ZERO discourse here--just fear mongering and name-calling. It all comes across as extremely pandering and childish. Hopefully, that will change.
It would be one thing if Calacanis had some semblance of independence, but as a partner in Sequioa, he is, quite literally, a fiduciary in a competing firm.
How would you like to have your business's private contractual affairs paraded in front of a bully pulpit?
No one likes to have their private business contracts leaked, but it's always a good idea to operate in a way that you can withstand public scrutiny.
Many other qualified investors--both Angels and VC's--have also been critical of the same business practices that Calacanis is criticizing. For example, the Angel Capital Association, Brad Feld, Fred Wilson, Joe Platnick.
Given that Mr. Calacanis is active on this thread, he clearly would be the best source to clarify things.
FWIW, (see below) I also disagree with these practices, but have serious reservations on the methods and motivations employed to expose them.
So, I'm fairly down with the concept of creating something competitive! I mean, that's what I did when I got upset about the DEMO conference charing startups $20k for six minutes on stage!
IE, if not for the Crusade (or Jihad), do you have a reason for running an alternative?
1. do it in a free or cheap location 2. ask a law firm to buy breakfast 3. use open source software/posterous to host the website 4. don't be a greedy f@#$%k and take $6k from startups desperate to raise capital.
best jcal :-p
I believe it's called TechCrunch50.