During our meeting, the discussion briefly turned to the subject of charging entrepreneurs to submit their plans to angel groups.
Some sources have been critical of the practice. Nevertheless, a growing number of angel groups are charging entrepreneurs anywhere from $100 to $3,000 to submit their plans or present to groups.
I've spoken to many angels about this subject and I've found three primary reasons that angel groups charge entrepreneurs:
- It acts as a filter for entrepreneurs who aren't serious.
- It forces entrepreneurs to pay attention to guidelines set forth by the angel group. When entrepreneurs have to pay to submit, they are sure to include all of the elements that the angel group requires in their submissions.
- It provides a revenue stream that covers the cost of group meetings, professional staffing, etc.
