Revolutionary Angels, a Cambridge, MA company that planned to give away as much as $300,000 in a private business plan competition, has mothballed its contest after failing to attract enough participants to pay for the prizes.
The contest, which was presented as a financing alternative for startups traditionally excluded from the venture and angel investing culture, was to have raised the money for the prizes through contestants’ own entry fees. About 20 companies had entered Revolutionary Angels’ first competition, ponying up $4,995 each. But the organization needed a lot more than that, about 50 to 60 participants, to make the contest viable, according to the company’s founder and CEO, Chris Hurley.
“We had more people interested, but they just weren’t pulling the trigger,” Hurley tells Xconomy. “I decided that we just weren’t going to reach the goal, and that the best thing to do was refund people their money, shut it down, and move on.”
Hurley, a former member of the corporate development group at Sun Microsystems, closed the company on May 1. He has since taken on a new role as vice president of corporate development and strategic alliances at Thinking Phone Networks, a Cambridge startup that helps companies integrate business applications such as SalesForce.com into their telecommunications infrastructures.
But he says he hasn’t given up entirely on the idea behind Revolutionary Angels. “It’s on the shelf,” he says. “The domain name is not going away, and I’m not going away.” The Revolutionary Angels website is still in place, and does not mention the contest’s shutdown.
A lack of contest participants wasn’t Revolutionary Angels’ only challenge. From the start, Hurley’s plans were met with derision from many in the venture and angel investing community, who attacked the program as an attempt to swindle startups out of their scarce cash. Seth Levine, managing director at the Boulder, CO-based venture firm Foundry Group, criticized the Revolutionary Angels contest as a “pay to pitch” operation that made contestants cover screening costs that investors themselves ought to bear.
“There is no circumstance in which entrepreneurs should pay to pitch their business to prospective investors. Period. End of story,” Levine wrote on his blog. “The fact that Revolutionary Angels calls their scheme a ‘business plan competition’ is reprehensible.”
Numerous critics echoed Levine’s sentiments, including
