Actually, that whole "paying to build a fanbase" line is often a red flag. The problem is mixing up paying for a real show slot versus just buying tickets you have to sell. A sketchy promoter charging a band $500 to play a 20-minute set where they also have to sell 20 tickets is pure exploitation. But a legit DIY space might charge a flat $100 room fee to cover costs, which is different (you're renting the venue, not paying for audience). The first one takes advantage of new artists' hopes, while the second is just how some spaces stay open.