>Here is simple way I look at it - if you can remove 5% of total noobs and get $1000 to spend more on marketing materials, why you shouldn't do it?

depends entirely on how many good prospects also get removed. A grand in marketing materials is not a big deal if you have enough money to invest.

If it removes more unsuitable than suitable candidates, then it's a good deal; I'm just not convinced that is what happens. I think you get some adverse selection- The sort of people you want to invest in are going to be focusing on their business rather than focusing on getting investment, so I suspect you'd get vastly better results making your event 'invite only'