You’re a new startup on the tech scene in Europe, perhaps you’re a brand new entrepreneur. One day you get an email saying you’ve been shortlisted as a finalist for a “prestigious” award, putting you in the “Top 200” in Europe, out of “hundreds of applications”. Of course, hungry for exposure, you jump at the chance only to be told that you’ll be charged $3,820 (€2,900) to pitch to investors and attend the awards. This is the experience of many startups that have contacted us about the Red Herring 100 Europe Awards. We decided to put the concerns about the respectability of the awards to the organizers, who deny charges from startups that the event is now a revenue-raising exercise, lacks respectability in the marketplace and is trading on Red Herring’s long-lost past as an editorial force.
For those of you unaware of the history, Red Herring was a print/online technology business magazine, which flourished during the dot com boom, and circulated globally. With the dot com bubble bursting, the magazine ceased publication in 2003 but was re-launched in late 2004 under publisher (and now chairman) Alex Vieux (pictured) and editor-in-chief Joel Dreyfuss, but it again ceased print publication in 2007. It had an online-only magazine until 2011 – today it has a skeleton editorial product with ‘news’ going up barely three times a week. However it continues to run the Red Herring 100 technology startup awards, which occur annually in Europe (Amsterdam), North America (Monterey) and Asia (in Vietnam). These days the Red Herring operation is run from an office suite in La Jolla, California. Vieux is a former Le Monde journalist and launched the now defunct ETRE technology investment conference with fellow US journalists in 1990.
Clearly, Red Herring had a brand that the marketplace deemed editorially valuable as a third party validation of technology startups. However, many startups have contacted TechCrunch to complain that the exact same scenario played out in our opening paragraph has happened to them when they have been approached to participate in the Red Herring 100 Awards. For a tech startup – most of the time pre-revenue – to spend such a large amount of money is a big commitment, so we decided to look into Red Herring’s claims that the awards deliver on their promise.
Of concern is the fact that during our enquiries we found little evidence that hundreds of startups – Red Herring claims 500 applied last year – had applied to the awards of their own volition. Indeed, the vast majority of startups we’ve spoken to about this say they only looked at the event after being cold-called by Red Herring either by phone or email or both.
We also found that it was only when a startup expressed interest in attending they were told of the $3,820 (€2,900) fee. Red Herring however says it is transparent about the fees involved.
Additionally, we found only a tiny number of VCs and CEOs taking any interest in the awards as a method to assess a startup.
These supportive VCs and CEOs tend to be predominantly based in, or are from, France. Alex Vieux, the publisher and chairman of Red Herring, is originally French. We have found no evidence to suggest that the fact that Mr Vieux is French has had any improper influence upon the participation of French VC’s and CEO’s in the Awards.
We put the following concerns to Vieux.
• That the Red Herring 100 Europe Awards no longer have the reputation they had, are worthless, and are not worth the $3,820 (€2,900) that is asked of entrants, especially cash-strapped startups.
• That they are run with a scant interest in building the tech startup eco-system and appear to be a gratuitous and blatant revenue raising exercise rather than a prestigious event which can gain a startup traction amongst investors.
• That there is no credibility in the selection process anymore.
• That the awards are not transparent and do not publish judge’s names.
• And the awards are trading on a long lost reputation.
Despite failing to provide us with a list of judges other than Vieux himself, Red Herring insists the awards are transparent.
These pages link to a detailed form. This requires applicants to submitted intimate company information such as EBITDA and CAGR.
The submission form itself makes no mention of a fee, though it does link to a page which says “The fee to attend an event, which is run autonomously from the publication, is fully disclosed and agreed upon by all companies.”
Vieux told us: “Over the past two decades, the process has been improved and continues to be improved at all levels: sourcing and identification of start-ups; selection process and criterion; communication to the start-ups, etc.”
Vieux says judges comprise of “former or current Red Herring journalists or associated with the editorial process at the Red Herring with significant credentials,” though he omitted to name names or point us to a published online list of judges.
Defending the $3,820 (€2,900) fee he said Red Herring “scouts over 800 companies on each continent, and many of these are rejected when we feel they do not meet the criteria. Last year, there were more than 500 completed submissions. Like many other high-end conferences, with high-end meals and parties for 2-3 days, and with extensive networking opportunities a top-tier audience of VCs, corporate VCs, investors and other CEOs, there is an entrance fee. This is fully disclosed.”
Although the ‘awards’ in effect run across two days of networking and pitch sessions, there is little information about how this works on the awards pages other than general references to meeting CEOs and VCs.
However, startups we spoke to which had been asked to participate said the fee was only disclosed at the final stages of the process.
Vieux says that the high entrance fee was decided upon when in 2003 “to avoid sponsorships from corporate and VCs… because we wanted to distance ourselves from conflicts of interests. We believe it is difficult to impartially judge companies when some of them might already be in your portfolio – or compete with a company in the portfolio.”
From the outside, the process sounds rigorous.
Red Herring says it reviewed 500 fully completed submissions in 2012 and 2013 from Europe. It also says that startups “deemed to have met the criteria for consideration” are contacted by email by Red Herring to set up a 30-minute phone conversation. These conversations cover all sides of the company’s business and plans. That email, says Red Herring, “includes a link which clearly indicates the existence of a fee”.
Vieux says that this is far better than awards where “applicants must pay a fee before even knowing if they meet the basic criteria”.
TechCrunch is currently unaware of a startup awards, or any event, that operates in Europe in this way.
Vieux told us “there is never a fee unless someone chooses to attend the conference, which also includes a presentation slot in front of top investors. Many companies have become funded as a result of these meetings, even some who did not receive a Top 100 award.”
He says “The fact that many companies or entrepreneurs who received – or even competed for – a Red Herring 100 award come back again and again with their new companies also speaks greatly to the value of this conference and award competition.”
As part of our research into whether startups are applying for the awards independently based on its alleged reputation, or whether they are simply responding to the offer of paying to attend the awards, we tweeted from both the twitter accounts @mikebutcher (51,000 followers) facebook.com/mikebutcher (96,000 subscribers) and @TCEurope (38,000 followers). We asked the question: “Who of you out there has actually entered your startup (*without* prompting) into The Red Herring 100 Awards?”
Of the 6 directly relevant responses we got back, here are 5 representative examples:
Brian Porter @poornerd:
“@mikebutcher I entered my startup for the Red Herring 100 Awards 10 years ago…”
Nikos Moraitakis @moraitakis:
“@mikebutcher a few years ago we were “invited” to participate; it looks very much like a “pay for a badge” affair – not very credible imho”
Atilla Torgay @atillatorgay:
“@mikebutcher I have. For the Red Herring Top 100 Asia. The event was good organized, I met interesting entrepreneurs and some VC’s.”
Paul Allen @PaulieA:
“@mikebutcher not many I’d wager. all the joys of being upsold to / hassled before getting the opportunity of using a badge on your website”
Hillel Fuld @HilzFuld:
“@mikebutcher I have. A few years ago. We won :)”
According to Vieux, “dozens of conference participants every year, winners or not, have sent us letters and emails to let us know that they received significant value from the presence at the show.”
While it’s possible that Red Herring may well have received submissions to the awards without contacting companies direct, this suggests that the “500” submissions Red Herring claims to regularly garner for the awards are prompted by ‘cold calling’ and a sales pitch rather than favorable industry buzz.
One startup founder contacted by Red Herring was asked to pay to participate. He told us: “This guy Alex Vieux, called me up and basically made me pitch the business to him. He then told me how amazing we were, how he was best mates with all our investors.” The founder in question spoke with his investors and told us that this was not the case.
The founder went on: “Of the 800+ applications they had for the awards, we’d been selected as a top 200 company. He [Vieux] then goes on talk about an amazing award ceremony in Amsterdam with top-notch guest speakers etc. and then right at the last minute, he says (very much in passing) that it’s going to cost $3,820 to attend. Why $3,820 I asked? That’s ridiculous! His rationale: “Having VC’s sponsor the event leads to back scratching behind close doors and results in the investors putting lots of pressure on Red Herring to give awards to companies whose VC funds paid for the most expensive lunch” etc. From the sounds of things (and from what I’ve read online), in my honest opinion this guy is just moving from country to country trying to take advantage of young, cash strapped start ups like us. What a dick.”
Another startup founder we spoke to had this to say: “I think they are basically selling an award without any meaning. It is supposed to be a start-up award with great legacy, but these days it is really just a paid certificate. The interesting thing is that skimming through all their e-mails from 2010, I grew aware that they didn’t write anything about money anywhere and they did not leave any attachments (it was all online forms). Don’t know whether they want to hide the evidence that they charge participants in the selection, but it certainly might give you the impression that they are a bit sneaky about it.”
Serial entrepreneur Andrew Scott (founder of The Taploid and Rummble) told us on the record: “Rummble was on the Red Herring 100 but we didn’t pay the ticket to go to the event. That was 5 years ago now. I think if anything their presence has faded since then. Arguably some mainstream press may still rate them, but I don’t feel they’ve been taken seriously by the core tech community for a while.”
We spoke to a former employee of Red Herring in Europe who was involved in events, but who asked to remain anonymous.
He said he had “spoken to few of my colleagues who also left over the years and we cannot understand why people still go to an ‘Alex Vieux event’. Red Herring was a great brand when Tony Perkins had it.”
In Europe the former employee said “there is no credibility in the selection process anymore. But apparently, there are still firms willing to pay to get the award. It seems to be based on past reputation and not knowing (or caring) about what’s happening behind the curtain. It probably says more about the state of early-stage firms trying to gain traction. Good networking events are still important. But I think ethics are equally important.”
We asked Mt Vieux to respond to this critical article about the awards, but he did not.
In defending the awards, Vieux said the efficacy of the awards in identifying companies capable of significant exits had been born out by the awards given to companies which went on to further success, including “Baidu to Renren in Asia, Spotify, Daily Motion, Shazam, Privalia and Skype in 2003.”
Asked if he could provide examples from 2012’s awards, Vieux said he could provide “feedback from CEOs who have enjoyed the conversation and the impact of those exchanges and [have said so] in writing.” Red Herring has a testimonials page with glowing references and claims all are from 2012 Top 100 Events in the US, Europe and Asia.
Subsequent to our enquiries Vieux said he would ask companies that had been satisfied by the Red Herring Awards to contact TechCrunch with supporting statements. We were emailed by four companies, which defended the Red Herring 100 awards.
Michel Dahan of the Paris-based Banexi Ventures told us that he had taken part in ETRE (organised by Vieux) in 1990 and that “I have personally attended the conference for a couple of decades….Since 2003, we have taken part in the Red Herring Europe Top 100 events specially catering to start ups from over thirty nations… We will not stress enough how much Mr. Vieux and Mr. Alpenia have done for the European VC industry and for its start ups. They work very hard and we value their knowledge and network.”
Yann Chevalier, CEO of France-based Intersec.com says “In 2012, we were contacted by Red Herring. We were skeptical at first. But we went to Amsterdam. We won Red Herring Europe Top 100 2012. Intersec has crossed the $100m milestone. Red Herring discovered our company and has helped us constantly and consistently since then. We have learned a lot through Red Herring. We have met with extraordinary peers. They do an excellent job for entrepreneurs in Europe.”
Julien Dahan, CEO of Neocasesoftware.com (with offices in France, UK and the US) says his company, a human resource management SaaS software, was selected for the Red Herring Europe 2011 Top 100. He says he was “quite impressed by the quality and the candor of the speakers. It surpassed my expectations because I met with entrepreneurs from other European countries and we shared our experiences…thanks to Red Herring contacts we have met our US VCs.”
Yves Sisteron, Managing Partner of LA-based GRP Partners (which includes high profile VC Mark Suster) , told us “Our partnership has attended Red Herring events since 1999… and we find it very useful. We come across many successful projects at different stages, from Series A to late stage… we believe that it definitely helps the ecosystem and we will continue attending Red Herring Top 100 events in the future.”
Finally, we asked, Vieux a point blank question: If a startup that is selected for the Red Herring 100 does not pay the $3,820 (€2,900) to attend, can it still win the awards and appear in the Top 100 listing? We also asked him to provide examples from the past where this had happened.
At the time of publication Mr. Vieux had not responded to this question.
Disclosures: Technically, TechCrunch competes with Red Herring on content and events. Mike Butcher is the Founder of The Europas Tech Startup Awards, free-to-enter one-night-only awards ceremony and party, where the most expensive ticket in 2013 was €200 and the cheapest €75. A list of judges is published annually.