As I ended a conversation Tuesday with an entrepreneur who was once funded by the First Angel Network, he said, “The worst thing that could come out of this would be for FAN to shut down.”

This is the controversy that erupted Tuesday when David Crow of StartUp North published a blog criticizing the Halifax angel network for charging entrepreneurs to pitch and taking money from the Atlantic Canada Opportunities Network.

Crow believes strongly that entrepreneurs should not pay to pitch investors. His main complaints – highlighted by boldfaced expletives – are that entrepreneurs pay FAN $3,000 and FAN Co-Founders Ross Finlay and Brian Lowe 8 percent of the funds raised in cash and stock. FAN has also received at least $1.1 million in funding from Acoa over five years.

“There’s no standard model for angel groups in North America,” said Finlay in an interview Wednesday, which I initiated to give FAN a chance to tell its side of the story. Finlay said the FAN model works, funding four companies a year and providing sustainable funding for the group.

Crow’s blog created a wave of ire on social media sites, with several community members expressing outrage at FAN’s practices. GoInstant Co-Founder Jevon MacDonald, admitting the difficulties in sustaining an angel network, said in another blog the FAN model “is artificially sustained, it is egregious and the model needs to be wiped out.”

Finlay and Lowe point out that FAN, which has almost 100 members, has channeled $9.5 million into 23 companies. Including co-investments, these companies have raised $70 million and employ 165 people. No entrepreneur that formally pitched FAN members has ever left empty-handed, said Finlay. FAN is recognized as one of about five angel organizations in Canada that is always active.

“The First Angel Network has presented this model at the National Angel Capital Summit across the country because they’ve seen the tremendous success we’ve had,” said Finlay. “One of the biggest concerns among angel groups across the country is always sustainability.”

Finlay also said he and Lowe hold stock in the companies because they would only bring a company before FAN’s members that they personally would invest in. They also offer advice to companies that are not invited to pitch. They meet with about 70 companies a year, which he said has amounted to about 500 companies over the eight years FAN has been around.

The entrepreneurs I spoke with who have tapped money from FAN were generally pleased with the experience. The entrepreneur cited in the first paragraph said FAN should have outlined all its conditions earlier in the process, but overall he was happy with the amount of money he raised. Another recent FAN pitcher said he was fully aware of the process throughout. He gushed about the entire process because it gained him potential clients as well as money.

“It’s a lot cheaper than the cost of going to Silicon Valley to raise money,” he said of FAN’s cost, adding that it’s up the entrepreneur to decide whether they want to pay to pitch.

Finlay said that FAN is not the only angel network in Canada to receive government support. Anges Quebec receives millions of dollars each year from the Quebec government, he said, and the Saskatchewan government also supports its provincial network.

One entrepreneur said the best outcome of this brouhaha would be another angel network. There are alternative networks. The smaller Newfoundland and Labrador Angel Network has become more active and there’s East Valley Ventures of Saint John, which is a group of individual investors who work together to back and mentor companies.

Individual entrepreneurs are also tapping angels outside of structured groups like never before. According to data collected by Entrevestor, FAN accounted for about 10 percent of the angel money raised in Atlantic Canada in 2012, and only about 2 percent of the $58 million in equity funding in the region.

“There’s a lot of support for angel groups across Canada,” said Finlay. “We’re all working hard to bring early stage companies to success and that’s what we’re going to continue to do.”

Full disclosure: I am a former member of FAN and did about $2000 of work for them three years ago.