Charging entrepreneurs to pitch to VC is an absurd thing. With the recent Jason Calacanis’ Jihad over such acts in the States, the phenomenal of VC and Angel who charge exorbitant fees for startups to pitch to them have finally arrive in Malaysia.
The Virtuous Investment Circle (ViC) was set up on 4th August as one of Malaysia pioneering Angel investment group. According to their site, “ViC is a non-profit organisation passionate about creating a vibrant ecosystem for angel investing in Malaysia.”
An article in Lowyat Forum
The Virtuous Investment Circle is an independent not-for-profit angel investment group that aims to provide innovative start-ups with enough funds and mentorship to see them through the early stages of inception. Offering deals worth between RM50,000 and RM2.5million, VIC also has a solid list of members that poses years of industry experience in various fields of business.
ViC declares a four-fold goal which hope to help the angel and startup eco system in Malaysia:
1) To provide a platform for innovative start-ups to raise funds and for investors to invest.
2) To encourage and strengthen the local angel community.
3) To generate quality deal flows through rigorous screening process.
4) To provide guidance and mentoring for new business angels and entrepreneurs.
This is an awesome initiative to bring people to invest startup locally.
However what happened yesterday shocked the entrepreneurial community.
In its application process, applicatants are required to summit their application in 4 step.
Step 1: Investment Proposal
Step 2: Nominal Application Fee
Pay the nominal RM500 application fee. We charge a nominal RM500 fee for each application/submission – to ensure that the companies who apply are serious about applying for angel funding as our angel investors are serious about funding companies.
Note: Paying the application fee alone will not guarantee a pitching session with angel investors.
Step 3: Email Proposal and Payment Proof
Wait WHAT? Go back to Step 2. A bunch of angel investors asking for poor founders of startups to pay to meet them and not even guaranteeing a pitching session with their currently 15 nameless angel investor?
Teng Siong Ong wrote in his blog:
Before I move on, let’s do a simple math here. VIC charges RM500 for each investment proposal. In US, incubator like Y Combinator gets around 1k application per round, which is about 2k per year. Let’s assume that VIC only gets 10% of this number, which is 200 per year. They are making an awesome amount of RM100k per year just by reading investment proposals by poor entrepreneurs like you and me.
ViC also responded over their site to ignore Step 2 (paying RM500) for now until decide on a further action.
We’ve been trying to get hold of people from ViC and nobody seem to be picking up their phone. We will be updating here with more details.
Update 12pm 3rd Sept 2010:
We got hold of Bob Chua, one of the founder of Virtuous Investment Circle (ViC) and he said that this angel network is modeled after what most of the angel network ie Keiretsu Forum and it is not too dissimilar from what the other network in the region and even in the States have to offer. The idea behind the RM 500 application fee is to filter out people who are not too serious about getting funded and the price very little compared to other angel groups. He adds, if you are really serious about your business and confident about your startup, just summit and ignore Rm 500 application fee.
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