in Angel Investors, Investors, New Brunswick, Newfoundland, Nova Scotia, Prince Edward Island, Startups

Atlantic Canadian Founders Deserve Better Than FAN (First Angel Network)

CC-BY-NC-ND-20 Photo by Stephen Poff
AttributionNoncommercialNo Derivative Works Some rights reserved by Stephen Poff

Recently, I have had the pleasure of travelling to the East Coast and working with founders. I have seen the amazing companies and the founders across the region. Moncton, Halifax, Saint John, St. John’s and Charlottetown (among the varied cities). There are amazing companies like LeadSift (disclosure: I work for OMERS Ventures who is an investor in LeadSift), GoInstant, Verafin,, Lymbix (disclosure: I sit on the Board of Directors), Introhive, InNetwork, Compilr and others.

The region is bristling with great founders, great ideas and a lot of untapped talent. It also holds some amazing secrets like Toon Nagtegaal (LinkedIn) who runs a (also ACOA funded) program for startups that I have been lucky enough to be invited to co-teach (disclosure: this is a paid consulting gig). There are amazing people and companies across the Atlantic Region. It’s only a matter of time until there is another HUGE exit.

However, the region also is a small community that has it’s own culture and politics. Those small town politics have allowed nepotism and crony capitalism to seep in and it has allowed terrible deal structures to be put upon unsuspecting founders and companies. This pisses me off!

When we started StartupNorth we promised ourselves we would always stick up for founders and startups when it mattered. We continue to  support, educate and connect startups and founders with other founders, with capital, with new ideas and educational resources. We need to identify the BULLSHIT that is being allow to pass in Atlantic Canada as supporting entrepreneurs so that the amazing investors that are there don’t have to compete with a backwards and ill-conceived entity.

First Angel Netowrk

Who? I’m talking about First Angel Network (FAN). Why? Here is an example of the full deal they present to entrepreneurs:

  1. Startups apply to pitch the non-profit FAN which is funded and supported by ACOA and others.
    • Most of this funding goes to pay salaries as well as to cover travel expenses.
  2. If a startup is selected to pitch FAN, the startup must agree to pay $3000 to the non-profit  FAN.
  3. Startups MUST also sign a “Consulting Agreement” with a for-profit consulting company owned by Ross Finlay and Brian Lowe.
    • You can NOT pitch the non-profit UNLESS you sign the consulting agreement with the for-profit company.
  4. Startups then pitch the non-profit and if successful get a deal done
  5. If a deal is done, the consulting agreement gives the for-profit shell company and FAN organizers 8% of the total proceeds of the transaction
    • 4% in stock directly to Ross Finlay and Brian Lowe (not the consulting company, directly to the individuals)
    • 4% in cash to the consulting company

This is so wrong! On so many different levels. This is worse than pay to pitch.

Crony Capitalism

The thing that pisses me off the most is that the most nefarious part of the process, the consulting company and payouts to individuals, is not listed on the FAN Funding Process page. We have individuals who collect a salary that is partially (if not completely) funded by a government agency (ACOA). First Angel Network Association received at least $1,123,411.00 in funding between 2006-2011 (nothing reported for 2012). That is an average of $224,682.20/year in funding, and that is just what we could source publicly.

Getting paid by a government agency to source your own deals. Seriously, if you thought management fees were high, what about tax dollars going towards salaries of investors. They are using federal funding to source their own deals and cover expenses and salaries. Something is wrong here. Then they charge entrepreneurs for the privilege of their investment. Which someone already paid them to source. The cost of this capital is incredibly expensive to entrepreneurs taking this investment and to the region.

Atlantic Canadian entrepreneurs and startups deserve better than this.

Do Not Pay to Pitch

Startups should not pay angels or angel networks to pitch. Jason Calacanis wrote the definitive piece on why startups should not pay angel investors to pitch.

“It’s low-class, inappropriate and predatory for a rich person to ask an entrepreneur to PAY THEM for 15 minutes of their time. Seriously, what is the cost to the party hearing the pitch? If you answered “nothing” or “the cost of two cups of coffee” you win the prize!”

Jason eloquently describes why this doesn’t work. It is a imbalance between cash poor startups and rich investors. The imbalance is made worst by. We have been running Founders & Funder$ events. There is no imbalance. Everyone pays the same. Founders. Funders. We try to curate the audience to ensure that only founders actively raising money attend. We also invite a limited number of funders that are actively doing deals (criteria change based on angel investor versus institutional investors). We want everyone to be on equal footing.

And there are a lot of startups and founders that will argue that Jonas, Jevon and I have strong track records (well at least Jonas & Jevon do) and even stronger networks:

“Now, before you go saying “Jason is connected and he has access to angels” remember that I hustled my way into this industry from nothing. I networked at free conferences and figured out a way to get on the radar of uber-angels like Ted Leonsis, Fred Wilson and Mark Cuban. They paid attention to me because I had good ideas. If my ideas had sucked, they would have ignored me. Period.”

Our goal has been to help connect and educate founders and startups. We continue to believe that it is not government agencies, or venture capitalists, or angel networks that will build the next generation of successful Canadian companies. It is the founders and the employees of these startups. It’s the big ideas and the big execution that result from the efforts of dedicated people. They are the ones who deserve a great deal, not some middle man.

What can you do?

  1. Do not pay to pitch. Avoid groups like First Angel Network like the plague.
  2. Tell the people who fund FAN and other angel groups who have a pay to pitch model that you believe they should cut off funding.
  3. If you know an angel investor within an angel networks that make you pay to pitch like FAN, tell them what a bad deal they are getting and offer to connect them to great founders.
  4. Help fellow entrepreneurs by making introductions to qualified angels directly
  5. Explain to your peers that an investment by networks which make you pay to pitch, such as FAN, can only be considered as a means of last resort, and taking this money will affect your future funding opportunities negatively.
  6. List your startup on AngelList, our StartupIndex, Techvibes index and other places to get exposure FOR FREE to great investors

Atlantic Canada is generating some of the highest returns in the country right now for angel investors. The community is small but very focused on big outcomes and it is really showing. I think it’s time to cut ties with this old model and to start giving the founders in Atlantic Canada a deal worth taking.


  1. Completely agree David – I saw this in the region as well. It’s not just FAN – It’s everywhere. This is rampant in SK as well. The wrong people have the ear of govmt. There is a lot of backwardness that needs to be broken. Curious on your view of the Startup Visa

  2. There is so much positive energy and momentum across the Canadian startup landscape. 

    It’s time to clean house and ensure founders don’t waste a minute with snakes. 

    That these buffoon’s scam is being subsidized by the government made me puke in my mouth.

  3. Awesome post buddy. Hard to believe this is actually a reality for some founders. Echoing Mark below, great job calling them out.

  4. I
    started my VC career in 1996 focused exclusively on investing in Atlantic
    Canada. I was part of a small Halifax-based team that ran a government and bank
    sponsored fund called ACF Equity Atlantic and I have an extra soft spot for
    east coast entrepreneurs. Back in the 90s, east coast entrepreneurs were
    frustrated because of a lack of VC in the region and a reliance on the mega angels (if they
    said no). More frustrating was the group in the middle making money off either
    group by playing matchmaker and a ridiculously small ecosystem. I moved away in
    2000 and had hoped things would change. There are always twenty sides to a story
    as it relates to your post on FAN but I’m disappointed to read this stuff might
    still be happening.

    Scott MacDonald
    Co-founder McRock Capital

  5. TOFounders Group Investor wiki? We have a similar database at YC that hugely helps wade through the shitty time-wasters & vultures.

  6. Good job calling this out David.  And great to provide exposure to Atlantic Canadian companies.  Well done!

  7. David,
    Great work in calling out this group.  This all relates back to our conversation about educating and elevating the overall ecosystem. Sadly, members of this group may just know better.  I have heard about other angel groups across Canada who do even worse than take your money for pitching…..they take a founder’s TIME and drag along the process for months and then don’t invest or, worse yet, invest at cut throat terms when the entrepreneur is desperate.  

    A lot of the problems stem from the fact that the government, by incenting angel groups to grow their membership rather than the quality of their membership or their deal ratio, incent the wrong behaviors.  Angel groups should not be about volume but about quality of their membership and their process.  I have recently met with a few local groups who understand that there are challenges and they are working hard to resolve and put forward quality groups who respect founders and the start up process.  We shall see….but it is another critical piece of the ecosystem that we all need to invest in and educate.

  8. Thank you Dave. 
    Boris Mann (@bmann:disqus ) has been vocal out west in calling out groups that continue to participate in Pay to Pitch style practices. The young/new/inexperienced founders need leaders like yourself and Boris that call out and stand up for their rights.I recently joined the board of NACO (National Angel Capital Organization) and will be doing my part at the board/policy level to insist that this practice can no longer be tolerated.
    I would like to follow up with you when I am in Toronto next month.

  9. Right on Mike. There are some opportunities to have your voice heard locally over the next few days.

  10. I’m a former FAN member.  Only reason for leaving is that I moved back to California.  Ross and Brian do good work mentoring and financing budding entrepreneurs and nascent enterprises.  Did you check your “facts” with them before you maligned them in your self-serving blog (nice try at the Jim Cramer impersonation but it came across as hollow and contrived)?  I think that you would have found your “facts” to be largely inaccurate.  My guess is that you spoke to one or two disgruntled folks who didn’t get to pitch FAN and made up the rest to fit your POV.  FAN has invested several millions of domestic Atlantic Canadian dollars in well over a dozen (and I think I’m significantly understating that #) early stage Atlantic Canadian companies.  Some successful.  Some not.  But that’s the nature of the game.  They don’t need a foul-mouthed uninformed interloper spreading false information. 

  11. Hi Bruce,

    You are implying that I have “facts” that are incorrect. Please, help me understand which of the data points presented are incorrect. No one is arguing that FAN is a model that has deployed capital in Atlantic region. No one is disputing they exist or that they have deployed capital for their network. 

    Perhaps it is my opinion about entrepreneurs should be aware of fees and costs associated with the capital that they are raising, that you are disputing?

    I have stated my opinion about funding brokers in the past. See for specific details. Particularly, I find brokerage for early investments less than appealing. Mostly because outcomes and interests of the broker are not in alignment with the entrepreneurs or the investors. This changes as an organization matures and a broker is used to raise the valuation (then their compensation is part of the upside an in alignment with one party).

    “Foul-mouthed uninformed interloper spreading false information”, sir, I don’t think any of the information I am spreading is false. If you have a factual correct. Please share.

    As to the adjectives: foul-mouth – check; uniformed – on some topics; interloper (definition:a person who introduces himself into professional or social circles where he does not belong) – I can see how you might feel that way.

  12. What about the long list of rich investors who actually sign a term sheet, and then fail to close the deal on the day its supposed to close for typically no good reason, and then stick the start up who have no cash with a $25K legal bill? I think I’d rather pay a success fee, than have to pay legal fees for someone’s failure to close.

  13. A vetted list would be a huge help to first timers. The alternative would be do do a series of posts here profiling great investors.

  14. This one is easy: Don’t do a deal with anyone who forces you to pay fees for a deal that doesn’t close. Everyone takes responsibility for their fees. They aren’t “rich investors” they are low class and you shouldn’t deal with them in the first place.

  15. You say that David has his facts wrong. As a former FAN member, you probably know more than any of us about their model. Can you kindly tell us which facts he has wrong?

    I agree that David is foul-mouthed, but that’s barely in evidence in this post–try giving him a couple bourbons!

  16. In my experience, a closing fails in most instances because the sponsor has somehow “neglected” to disclose material information.  You folks sound like a bunch of entitled whiners!  There is no free lunch.  You may be brilliant in the design of your product, service, app, whatever.  But no one owes you anything.  You have to stump up with the whole package to close a deal.  It’s not like your school experience where no one kept score, there were no winners or losers and everyone got a trophy or a cupcake.  Try whining to the international competition, I’m sure they’ll cut you a break and give you as many free do-overs as you need!  If you want to play in the big leagues, act like grown men and women.

  17. David,

    Did you make one call to Finlay or Lowe for background, confirmation or otherwise, give them a chance to answer your allegations?  Were sponsors made aware of the contractual and financial arrangements from Day 1? (The answers is “Yes”, so they had the opportunity to forego the opportunity of pitching FAN if they thought the price was out of line.) You give no context whatsoever – is $200K a year from ACOA a little or a lot relatively speaking?  What are FAN’s annual expenses?  How does the $200K relate to FAN’s total revenue?  Relative to invested dollars, what are the overhead ratios and fees and are they out of line with other similar networks?  I presume that it’s simply easier to make heated allegations totally unencumbered by the facts.  And I don’t realy care if you’re pissed off.  Grow a pair and grow up.  See my response to Terry 1. 

  18. Bruce,

    You are correct I did not call Ross or Brian (but you already knew that). I have spoken to entrepreneurs in the Atlantic region that have raised from FAN and entrepreneurs that have declined to participate because of the fee structure. 

    Sponsors = Angel Investors in the First Angel Network? 

    You will gather from my post, my concern is not with disclosure to the network members or sponsors. My observation is of the lack public disclosure of process, fees and structure. 

    I don’t see how FAN expenses to ACOA funding ratio is relevant. If you feel it is relevant and would like to provide/disclose this information because you believe it sheds additional insight. Please…

    As a percentage of dollars invested. Well now we are to the crux. Is there a brokerage business around connecting startups and angel capital investments? I have clearly stated my opinion on this.  

    Other networks. Groups like Golden Triangle Angel Network do not require entrepreneurs to pay fees on capital raised.  For every example, I am sure you will provide examples that use a competing structure.

    Re: consulting services – I can’t recommend that any entrepreneur accept consulting services in exchange for equity (actually a percentage of a future round). Unless you know the valuation of that round before signing the consulting agreement because essentially you are setting the price for those services. There are other organizations like incubators and accelerators that offer similar services and ownership stakes, they are often either a dollar amount in a convertible debenture or a percentage at a fixed valuation. This allows entrepreneurs to understand the investment in their companies for the mix of capital and services they are receiving.

    I’m not making heated allegations. I am presenting deal structure. And further providing my opinion on why startups and founders should not pay to pitch and may question the consulting fees being charged.

    I don’t expect something for nothing. Startups should pay for services. They should also be made aware of information asymmetries that exist. 

    I think entrepreneurs should be able to remove information asymmetries and make informed decisions – I guess things are different in the real estate world. 

  19. No.  Sponsors = pitchers, the entrepreneurs raising money.

    And no.  Real estate.  Mining. Oil & gas.  It’s all business.  Similar rules, similar challenges.

    And thrice no.  These comments are all my own.  I haven’t spoken to Ross or Brian about any of this.

    You remove information asymmetries by asking questions and comparing alternatives.  And then making an informed choice. If you don’t get answers from a particular party, delete them from the choice set. But you shouldn’t expect others to level the field for you.  Certain laws help.  Dealing with honorable people is a plus.  And, at the end of the day, caveat emptor. 

    In any industry, there is a natural friction, and occasional antipathy, between the doer and the financier.  Twas ever thus.

    Your last comment piece makes some sense.  I take back the “grow a pair” comment – I read somewhere that you have kids. 

    Debate without vitriol ( and I’m guilty of the vitriol bit as well ) makes for a much better argument and, hopefully, positive results.

    You obviously have my info.  Contact me offline.  Maybe we could chat.  I’m in Toronto in early March (I’m presuming that’s your home base).  We could raise a glass or two then have a cage match (kidding).

  20. I grew up in Halifax, I have built my career in Toronto. A major reason I was influenced and chose to leave Halifax was the limited size and scope of the Halifax business ecosystem (in its entirety, not just tech Startups). What I observed, even at a young age, is that the maritimes is a very parochial place to do business. Crony Capitalism the rule, not the exception. On top of that, there is little to no evidence that successful entrepreneurs or business people promote or help produce a ‘tree’ of follow on success and wealth creation. The scions of maritime wealth and business empires create family dynasties not ecosystems. Those dynasties have many great attributes, charitable causes, jobs, and legacy. They have not however created legacy that has spun off other new businesses and individual wealth. Ecosystems depend on founders (see new post), the Valley wins because when companies there succeed they spin off many employees that produce new companies and capture a share of the wealth created, not to mention adjacent companies to the mother tree. How many people not in the family or small circle of ‘cronies’ became millionaires from Sobey’s, McCains, Irving, Clearwater successes? Meanwhile Microsoft, Oracle, Google, etc create 1000s of millionaires, spawned 100s of Startups and built ecosystems around themselves that where not some version of vertical and horizontal integratiI grew up in Halifax, I have built my career in Toronto. A major reason I was influenced and chose to leave Halifax was the limited size and scope of the Halifax business ecosystem (in its entirety, not just tech Startups). What I observed, even at a young age, is that the maritimes is a very parochial place to do business. Crony Capitalism the rule, not the exception. On top of that, there is little to no evidence that successful entrepreneurs or business people promote or help produce a ‘tree’ of follow on success and wealth creation. The scions of maritime wealth and business empires create family dynasties not ecosystems. Those dynasties have many great attributes, charitable causes, jobs, and legacy. They have not however created legacy that has spun off other new businesses and individual wealth. Ecosystems depend on founders (see new post), the Valley wins because when companies there succeed they spin off many employees that produce new companies and capture a share of the wealth created, not to mention adjacent companies to the mother tree. How many people not in the family or small circle of ‘cronies’ became millionaires from Sobey’s, McCains, Irving, Clearwater successes? Meanwhile Microsoft, Oracle, Google, etc create 1000s of millionaires, spawned 100s of Startups and built ecosystems around themselves that where not some version of vertical and horizontal integration. The business culture of the maritimes needs to change for its economic base to survive much less grow, otherwise I will continue to be the norm, a maritimer who left to make it happen. What is scary is what David has pointed out about FAN and its impact on the startup ecosystem in the maritimes replicates across most industries there. I doesn’t matter if you want to be a banker, a plumber, a doctor, or a startup founder, the numbers say young maritimers with ambition leave and don’t come back and this type of closed culture of scarcity is prime reason why. You can’t change geography and history, you can change attitudes and culture. Thanks for lighting a fire David.

  21. Scott– I hear similar sentiment a lot from folks who have moved away from here.

    My attitude? You don’t change anything by complaining so instead there are a group of us founders who are going to change the landscape ourselves and we aren’t asking anyone for permission. 

    All the people and institutions you mention are only limiting factors if you need them for something or ask for their permission. The beauty of the web is that it is global and we can get what we need from anywhere. Capital is flowing in from outside sources and with it comes great expectations of our startups to perform at a world class level. 

    We are only looking forward now. 

  22. As an angel who does early-stage deals in Toronto, I want to point out a couple of things:

    – All the angels I know think pay-to-pitch is sleazy as well.  I hate middlemen and I would never invest in a company knowing that 8% off the top was going to a broker.

    – Your point that entrepreneurs should stay away from pay-to-pitch organizations is spot on.  These organizations are the bottom feeders of the funding ecosystem and any startup that works with them is signaling desperation and/or cluelessness.

  23. “They are using federal funding to source their own deals and cover expenses and salaries” , isn’t this considered fraud or a serious conflict of interest?

  24. The Maritimes have amazing people, great schools, excellent bandwidth and *so* much potential — until you realize that something like 10 families own and run nearly *everything* and control most of the investment capital. I lived in Halifax as a transplant from the U.S. for two years. As much as I loved the city, the vibe and the astonishingly high ratio of young, educated, creative, and talented people, it became very clear that unless you were blessed at birth with a last name that could prove lineage dating back to the war of 1812, your ability to climb financially and socially is severely limited.

  25. David, you are initiating an important discussion. And like your comment, GTAN (Golden Traingle AngelNet) doesn’t charge deal fees.

    That said, all Angel groups do have a funding challenge relative to formal venture funds and/or the equivalent government funding bodies (e.g. MaRS IAF or Feddev IBI) in that they are largely volunteer run. And, as we know, volunteer models eventually can create burnout.

    So, I woud counsel this discussion to also focus on the recognition that to build well run investor groups will cost money. And, it is fair to discuss which sources of funding make sense and which are less desirable. Furthermore, Canada and the US are the only 2 countries that cling to “Accredited Investor Regimes” further making innovation, not to mention automation, in early stage funding much more difficult than in those other countries without such “nanny state’ securities controls on individual investors.

  26. Thanks for the InNetwork shout out David! Appreciate it! :)

    And great article! Good on you for calling out organizations like FAN. A startup should never have to pay to pitch – bad practice. Especially making a non-profit pay to pitch, that’s just straight up wrong.

  27. Scott, I tend to agree with much of what you have said however to Jevon’s point, there is an alternative option to complaining and/or leaving. I moved my family to Halifax with the goal to create and grow as many small businesses as I can to do something about the problems you have identified. So far I’m on number 4 and have created around 50 jobs in total. It’s been very challenging for sure but how else will it get better?

  28. Love the change and progress you Brandon and others are making in the region. Building a new ecosystem with its own culture is exactly on point. My intent was not to bemoan my homeland, but to point out an outcome of past behavior. I am pumped about what you guys are doing, as it gives me a business reason to remain engaged with my hometown. If kickass tech companies where making an impact in the global business world out of the maritimes 10-15 years ago maybe I would still be there. As it is my life is here in Toronto, which has less to do about Halifax than it does Toronto. I am engaged with the maritimes as an active member of I am proud of where I am from and want to help people from there succeed and in turn make the region a healthier ecosystem. Trying to bridge people, solutions, capital, and ideas between Atlantic Canada and Southern Ontario tech communities is a task I stepped up for within the ECC and I would love your help figuring out how to make things happen on that agenda.

  29. I am currently a member of FAN & take offense to this article. Everything seems to be about the entrepreneurs & we as investors are greedy capitalists meanwhile every entrepreneur is striving towards capitalism. How is it that I would ever get an opportunity to become an Angel investor? I’m not known to the start-up world but I have money to invest. How would they ever find me?

    As for the fees they are charged, let me get this straight…. you want to come pitch to me, ask me for my money & then I have to buy you dinner too? Did you know the cost to pitching all 3 meetings is over $8000 but they get charged $3000. Where does that other $5000 come from? Genie in a bottle? Tooth fairy? Easter Bunny? I know Santa didn’t bring it this year. It comes from membership fees & funding.

    About the consulting… as an investor it gives me confidence knowing that they have access to smart people for advice and guidance. I think it’s funny that people complain about them charging 8% in fees meanwhile these companies eventually bring on VC funding which is managed generally at 2% a year and with most start-ups taking 5yrs to get to exit that makes 10% so again they get another deal.

    I think if you wanted to do the “Start-up” world justice then before you wrote a piece condemning a group of investors you’d contact them for their side of the story instead of rambling off one side of it. All entrepreneurs make a decision to work with FAN, we don’t go begging to invest in them. It’s the real world folks not high school anymore. Time to wear our big boy pants

  30. Hi Courtney,

    Please accept my apologies, the goal was not to offend you or other angel investors. But to recognize that angel investing is critical to the success of a vibrant ecosystem. Finding, connecting and vetting potential companies is something that still needs to be done.

    I disagree with your characterization of venture capital management fees. They are a fee to manage capital, but they are a percentage of entire fund, not a specific deal. A broad overview can be found at including the two and 20 compensation mechanism that is common place.

    We do agree that connecting entrepreneurs with angel capital is a requirement for a vibrant, growth ecosystem.

    I don’t have a lot of comparison on an $8000 dinner. We host a Founders & Funders dinner in Toronto, where investors and entrepreneurs all pay for their own dinner ticket. The goal is to connect those that start early stage high potential growth tech companies with those that fund them. No pitches happen. Removing the barrier of the initial connection, and allowing the investors to follow their own diligence and process is key. All attendees pay the same, our most expensive was $150/person included dinner and 2 bottles of wine/table. It wasn’t a cost that need to be fronted by a single entrepreneur, in my opinion.

    Stay well.

  31. “Did you know the cost to pitching all 3 meetings is over $8000 but they get charged $3000.”
    Bullshit. The most you investor side spend on such meetings is venue cost, which is usually free/sponsored by some company letting you use their office space. GTFOH with that mess.

    “as an investor it gives me confidence knowing that they have access to smart people for advice and guidance.”
    Really? As investor, shouldn’t you be outraged that the startup forced to accept consulting services and give out further equity for what they may not need. Eg if startup already had suitable advisors or founders with adequate business+tech experience, WTH do they need phony services for? And where in hell is it ever ethical for the head of an angel grp to perpetrate such massive conflict of interest by forcing startups to use his firm’s services as condition of seeking funding from the grp? Hope to gawd your perspective is not widespread there… SMDH

  32. Well I apologize as well but I take offense to a direct attack and by using Brian & Ross’ names.

    As for the dinner… if you had called to get the other perspective before writing your blog you would have got a sense of how things work outside of the city walls. There are 3 dinners held in 3 provinces with close to 1000km of travel and a couple nights stay involved. Its not as simple as throwing a dinner downtown.I respect your opinion but you should also reciprocate respect in the fact that we do not force any company to seek the funding of FAN. It is a choice of the entrepreneur. Maybe some of the companies actually like the consulting. You can speak for the disgruntled entrepreneurs you spoke to but you cannot speak for all of them. As for the diligence well, I choose to have FAN do that work for me and bring forward the company they feel we would be most interested in and that is ready for FAN funding.

    As I said I respect your opinion and your right to free speech but please, next time you are going to attack someone or some group, you should seek their perspective and reasoning before forming such a harsh opinion.

    I wish every start-up success especially those in Atlantic Canada

  33. One small note on the economics of the dinner Courtney– 100 FAN members X $1000 membership fee = $100,000 in revenue per year.

    Fan puts on 4 dinners (quarterly) in two provinces (just NB and NS these days I believe), so 4 X 2 = 8

    $100,000/8 = $12,500 available for each dinner.

    100 members spread across 2 dinners = 50 angels per dinner max. Let’s say the company brings 3 people, that is 53.

    $12,500/53 = $235/person per dinner that FAN could spend using just membership fees alone, without charging the entrepreneur.

    That is a great meal!!

    FAN has stated that their dinners cost upwards of $10,000 to host, so that actually leaves a surplus revenue of $2500 per dinner, not including $3000 from the presenting company. If the $3000 fee is spread across two dinners, that is $1500 per dinner.

    So that is $4,000 extra cash generated on a per meeting basis assuming you are actually spending $10,000 for a dinner of 53 people.

    If that is the case Courtney Keenan then I suggest for your consideration that it might not be the best use of cash for an angel group.

    If FAN is actually spending less than $10,000 per dinner then the cash generated (profit?) is much higher.

    The economics work out brilliantly without the entrepreneur paying a dime.

    Perhaps you do want the entrepreneur to pay something to show their commitment? There is great data from the Angel Capital Association shows that in the 38% (and only 38%!) of angel groups that do charge a presentation fee the average is a $338 fee (this is when they exclude FAN which they list as an outlier).

Comments are closed.


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    […] Halifax there has been a recent discussion about a local angel group and their funding model, which we do not believe is founder friendly. […]

  • If not an Angel Network, then what? » StartupNorth | StartupNorth March 9, 2013

    […] posted a pretty in-depth piece on the First Angel Network this week. This followed an awesome discussion on TechVibes about angel groups over the weekend. The […]