(FORTUNE Small Business) – Some people see others suffering and wonder what they can possibly do. But folks like Peter Senne don't hesitate before springing into action. Just over a year ago Senne looked at the entrepreneurial distress unfolding around him and asked himself how he could help fledgling, capital-starved company builders--while, not coincidentally, "making a few bucks" for himself. His answer took shape in IdeaSphere, a cross between The Gong Show and the MIT Enterprise Forum that packages entrepreneurial desperation into an evening's entertainment.

IdeaSphere selects and grooms needy entrepreneurs, then invites them to make their case before a room of 90 others, including fellow entrepreneurs, executives, consultants, and assorted cronies. Wait, make that paying cronies. And therein lies the irrefutable shrewdness of IdeaSphere's business model: While the presenting entrepreneurs may or may not walk away from the meetings with helpful advice, leads, or even capital, IdeaSphere always wins. IdeaSphere's members--that group of 90 would-be investors and mentors--pay $1,500 a year to attend these invest fests. (Senne describes attendees as "people who don't even consider themselves angels but can afford to make one or two investments a year and have fun with them.") And for the privilege of presenting to these fun-loving investors, entrepreneurs must forfeit 5% of their equity to the group. (The majority goes to IdeaSphere's members, with the rest claimed by its founders.) In other words, IdeaSphere can't miss. Although, as Senne rightly points out, "it's very much in our interest to make sure something happens. If nothing happens, we lose our future."

And he knows exactly what he wants that future to look like: IdeaSphere chapters hatching all over this desperation-dotted land, in every major city, like so many Boston Chicken units once did. Sound implausible? Not when you consider this: One of Senne's co-founders in IdeaSphere is George A. Naddaff, a man who refers to himself as "Mr. Replication" because of his love for franchisable businesses. Naddaff is best known as the fellow who discovered Boston Chicken when it was merely a single store near his office in Newton, Mass. (For more on Naddaff, see "Why Good Ideas Go Bad," May 2001.)

Senne first encountered Naddaff back in 1971, when each had founded competing child-care providers. ("Mine was more beautiful," Naddaff boasts.) In the 1980s Senne worked selling 345 franchises of VR Business Brokers, another company Naddaff started and later sold. (IdeaSphere's third partner, Emilie Marks, was also part of that effort.)

In the fall of 2001, having done everything from selling vacuum cleaners to founding a health-care data company, Senne was on the prowl for his next entrepreneurial engagement. So he got in touch with fellow Harvard Business School alumni, most of whom expressed enthusiasm about getting in on the ground floor of almost anything. He also met with venture capitalists, only to discover that they had business plans piled 200 deep on their desks, doomed to be forever unread. Was there any way, he wondered, to profitably unite those well-heeled executive types with empty-pocketed entrepreneurs?

He took the question to Naddaff, who immediately saw the possibilities in profiting by bringing the two groups together. And when Naddaff sees potential, his vision never falls short of grandiose. "At some point I want to go to somebody like a Merrill Lynch and say, 'Sponsor me for something like $100 million,' because of the 200 companies we'll be seeing around the country, probably three or four of them will be the next Microsoft or something like that," Naddaff says.

And if he's wrong? Well, people will still see a good show, with entrepreneurs unspooling videos, playing music, and holding raffles in the service of nailing down funds. "For a true deal junkie," says Senne, "this is pure entertainment."

On this particular day the entertainment consists of a physician who is so nervous his hands are shaking. "I'm answering this in a kind of long-winded way," he says apologetically, addressing a question from one of eight panelists seated in a conference room. Most of the people he's facing--in a room Naddaff calls his Hall of Fame because he has papered the walls with his own press clippings--are either IdeaSphere members or prospective members. Twice a month such a group gathers to audition entrepreneurs who want to win one of two spots at IdeaSphere's larger monthly meeting. In this case the physician is seeking $500,000 to fund product development at a software firm he's founded. After he's gone, the group agrees that IdeaSphere needs to coach him more before his name can go up on the main marquee.

Next up is an aspiring publisher, who combines the sad story of his own divorce with solid data (showing, shockingly, that a freshly divorced man's first priority is to have sex) to appeal for $750,000, which he will use to start a magazine for divorced parents. He has already sunk $300,000 of his own into the idea, which the group deems too high a risk to put before the entire crowd.

The last presentation, which involves a machine that may zap cellulite, leaves everybody excited. Senne, though, appears vexed by one issue: "What's the reason they haven't gotten any money already?" He's assuming, it seems, that any entrepreneur reduced to groveling--however gracefully--before a group of 90 strangers must have run out of options. He's probably right about that. Says Naddaff, "Those poor bastards used to get so much attention. Now the word 'startup' is like 'cancer.'"

Of course, the fact that entrepreneurs have to be willing to part with 5% of their businesses limits the pool of presenters. "We wouldn't give that equity up for it," says Mark Shuster, chief marketing officer of BioTech Corp., a maker of all-natural alternatives to pharmaceuticals. BioTech, it turns out, was one of the first companies to present to IdeaSphere--one of five or so that got in before Senne created the 5% requirement last May.

On the other hand, a home-design website, HomePortfolio.com, was about to shut down last June when it closed on $250,000 it raised at IdeaSphere. "There were a lot of learned people at IdeaSphere who looked at this and thought it had tremendous value," says Todd McDonagh, the IdeaSphere member who invested and now serves as chief operating officer of the company (whose co-founder, Tom Ashbrook, has written for this magazine). "But we're not out of the woods yet."

Well, join the club. Most of the entrepreneurs who end up presenting at IdeaSphere are probably better off for doing so, even if they don't get any money. Tom Brown, co-founder of a Boston toy store called Zoinks, didn't raise any money either. He put on a memorable show, however: employees dressed as Uncle Sam, Wonder Woman, and Spider-Man; goodie bags filled with wind-up toys. "We haven't gotten any funding out of it," says Brown, 35. "But it was a lot of fun." Maybe, given the tenor of the times, that's not such a bad outcome. But is it worth 5% of your company?

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