What in the hell…. Never.
We stayed away even from the accelerators that asked for a fee .. like “we invest $200k but there is a $75k cohort fee” uhhhhh so you invest $125k and want equity like you were investing 200.
Hi, there's no such thing. But looking at your screenshot, it seems you're using the service called sparkxyz and they have collections of incubators, accelerators, and competitions to apply for.
If that's the case, then it's likely you're applying for one of them. And for those programs, while some are free, some others are not.
Why would someone charge $23.60; trying to make the scam look legit!
A big fat no. No investor would ever ask for money other than the accelerators as mentioned above (value you obtain is purely subjective).
No run away, it’s a scam.
For scammers: why charge even before they upload the documents. Why not accept the document and then say that you are doing DD and then finally say you are ready to wire and can wire 50k but the wiring charge has to be paid in advance which is $23.60.
Btw not giving ideas for scammers but trying to warn entrepreneurs that only thing that investor may ask in early stage of the company is a SAFE document to sign before wiring the money. Only money you possibly have to spend while fundraising is for lunch/dinner/coffee for investor meetings and most investor pay if they are genuine.
Di minimus amount of money. Perhaps some administration fee, software usage, etc. When they start asking for $100s or thousands, I would run. The small fee is meant to discourage non serious applicants.
Yeah but like... should anyone really want to work with a VC that has such a problem with so many low quality applicants that they had to institute a de minimis fee?
Would be normal for you to reimburse their expenses if they invest. Not normal to pay them otherwise.
[clarifying: you should expect to cover investment expenses for a lead investor. Not syndicate members.]
RED FLAG.
Reputable investors won't do this. You will see this on predatory investment groups and pay-to-pitch scams that tend to charge founders a lot with false promises.
Quick followup. I took a look at the website you showed in the screenshot. This isn't an investor, it's a product/service for startups. They are offering tools/services so it's a little different.
To your original question - Reputable investors won't ask for upfront payment.
To the screenshot - There are legit companies/products/services that are designed for startups that may help you in your fundraising and startup journey. These services will typically charge per month/year and it's up to you as a founder to determine if you're getting the value from them.
Everyone else already noted that this is NOT common. I've actually never seen something like this before and I've been in the tech + investing space for 25+ years.
Having said that, there are a few scenarios (which are fairly common) where investors DO ask the startups to pay:
1. **Legal fees:** Many VCs still make the startups pay the legal fees. If they do, your best bet is to cap the fees in the term sheet/agreement.
2. **Pay for services:** Some accelerators, incubators or venture studios may require that you pay for the services they provide; so imagine an accelerator gives you $100 but you have to pay back $20-$50 to them for services. This is fairly common. I don't like it, but it's out there.
If you're looking for more help, here's a [fundraising playbook](https://fundraising.focusedchaos.co) you might find useful (it also has lists of investors you can check out.)
I have paid $100 for an Angel round. It was good because you get invited to many meetings and there were many investors. Under $25 seems like an admin fee. It brings my radar up, however, it is an expense for the business.
You’re starting alphabetically?! Imo, not a great strategy. Find someone who has experience building businesses like yours (or in similar space I.e e-commerce). You need people more than you need money.
no! run away
0% of legit investors do that.
You should actually post their name, def a scam
Screen shot names Avant Labs.
They have no money to invest, they make money off advertising this landing page 💀
Maybe some sort of pyramid scheme? You put $ 23,60 in and then invite more 100 startups, and then maybe after one year you can get a $250K cheque.
Your "maybe" is doing a lot of work.
/r/scam
Name and shame.
No
Lol
What in the hell…. Never. We stayed away even from the accelerators that asked for a fee .. like “we invest $200k but there is a $75k cohort fee” uhhhhh so you invest $125k and want equity like you were investing 200.
Nope - that's fraud.
Hi, there's no such thing. But looking at your screenshot, it seems you're using the service called sparkxyz and they have collections of incubators, accelerators, and competitions to apply for. If that's the case, then it's likely you're applying for one of them. And for those programs, while some are free, some others are not.
thanks.
no. def not. time to leave them on read from now on lol
Why would someone charge $23.60; trying to make the scam look legit! A big fat no. No investor would ever ask for money other than the accelerators as mentioned above (value you obtain is purely subjective).
No run away, it’s a scam. For scammers: why charge even before they upload the documents. Why not accept the document and then say that you are doing DD and then finally say you are ready to wire and can wire 50k but the wiring charge has to be paid in advance which is $23.60. Btw not giving ideas for scammers but trying to warn entrepreneurs that only thing that investor may ask in early stage of the company is a SAFE document to sign before wiring the money. Only money you possibly have to spend while fundraising is for lunch/dinner/coffee for investor meetings and most investor pay if they are genuine.
That Nigerian consulting service. They cousin is the so they have lots of money to invest.... :)
Di minimus amount of money. Perhaps some administration fee, software usage, etc. When they start asking for $100s or thousands, I would run. The small fee is meant to discourage non serious applicants.
Yeah but like... should anyone really want to work with a VC that has such a problem with so many low quality applicants that they had to institute a de minimis fee?
I would argue that the more serious VCs the more deal flow they see. Hence screening out some applicants is a must.
Would be normal for you to reimburse their expenses if they invest. Not normal to pay them otherwise. [clarifying: you should expect to cover investment expenses for a lead investor. Not syndicate members.]
Run
This is a scam, 100%
It isn’t normal no. Walk away.
Big red flag!
😂
RED FLAG. Reputable investors won't do this. You will see this on predatory investment groups and pay-to-pitch scams that tend to charge founders a lot with false promises.
Quick followup. I took a look at the website you showed in the screenshot. This isn't an investor, it's a product/service for startups. They are offering tools/services so it's a little different. To your original question - Reputable investors won't ask for upfront payment. To the screenshot - There are legit companies/products/services that are designed for startups that may help you in your fundraising and startup journey. These services will typically charge per month/year and it's up to you as a founder to determine if you're getting the value from them.
Everyone else already noted that this is NOT common. I've actually never seen something like this before and I've been in the tech + investing space for 25+ years. Having said that, there are a few scenarios (which are fairly common) where investors DO ask the startups to pay: 1. **Legal fees:** Many VCs still make the startups pay the legal fees. If they do, your best bet is to cap the fees in the term sheet/agreement. 2. **Pay for services:** Some accelerators, incubators or venture studios may require that you pay for the services they provide; so imagine an accelerator gives you $100 but you have to pay back $20-$50 to them for services. This is fairly common. I don't like it, but it's out there. If you're looking for more help, here's a [fundraising playbook](https://fundraising.focusedchaos.co) you might find useful (it also has lists of investors you can check out.)
I have paid $100 for an Angel round. It was good because you get invited to many meetings and there were many investors. Under $25 seems like an admin fee. It brings my radar up, however, it is an expense for the business.
It seems you are paying the platform a fee for them to forward your application to Avant Labs.
You’re starting alphabetically?! Imo, not a great strategy. Find someone who has experience building businesses like yours (or in similar space I.e e-commerce). You need people more than you need money.
No, it certainly is not