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So A Blogger Walks Into A Bar…
- MediaSquirrel 16y agoif true, this is huge...hugely bad.
- jasonshen 16y agoArrington has got a lot of balls to call out so many big players at once. I definitely want to see how this plays out.
- jpeterson 16y agoDid he actually call anyone out? I thought this was post was extremely light on substance, actually.
- joshbuckley 16y agoHe said "it included just about every major angel investor in Silicon Valley" - which people can make easy assumptions about who it is.
- guelo 16y agoI'm guessing the top 10 super angels would include Marc Andreessen, Chris Dixon, Ron Conway and the PayPal guys Peter Thiel, Reid Hoffman, Max Levchin, Keith Rabois Who else?
- sachinag 16y agoKeith confirms he wasn't there: http://www.quora.com/Keith-Rabois-were-you-at-the-dinner-meeting-Michael-Arrington-blogged-about http://www.quora.com/Keith-Rabois-were-you-at-the-dinner-mee...
- guelo 16y agoThis question at Quora http://www.quora.com/Who-are-the-Super-Angels-that-Michael-Arrington-is-talking-about-in-his-9-21-10-Techcrunch-post-So-a-Blogger-Walks-into-a-Bar http://www.quora.com/Who-are-the-Super-Angels-that-Michael-A...
- Eliezer 16y agoThe Quora list is very different from yours. And I think we should all be really careful about guessing, considering how much damage you could do to someone's reputation by guessing wrongly. There's at least one person on your list above who I'd be surprised to see part of this. Vide the cognitive psychology experiments which show that once you mention a person's name, it gets connected in memory regardless of how doubtful the source ought to be, etcetera.
- guelo 16y agoMy list was complete guessing, just me thinking of famous angels. The Quora list seems to be based on more actual evidence. In any case, it was Arrington that fingered all these people when he called them the "10 or so highest profile angels" who do "nearly 100% of early stage startup deals in Silicon Valley". Though after seeing Quora's list I think Arrington mischaracterized the group.
- khafra 16y agoThiel seems like a clear thinker, but almost anybody can gradually drift in the wrong direction--especially if, as grellas says above, it probably wasn't quite illegal.
- Eliezer 16y agoWell, he ain't on the Quora list and no one there has even suggested him yet, so let's all be a little careful with our public guessing, shall we?
- deleted 16y ago[deleted]
- xutopia 16y agoHe called out no one. Calling out is when you name someone. At this point it's just rumours.
- joshbuckley 16y agoProps to Arrington for the post. He definitely has integrity, and knows how to write an interesting post.
- siruva07 16y agohe also leaves just enough to the imagination. sure, everyone is assuming the top 3-4 usual suspects, but it was a room full of people -- wondering who were 8,9,10
- deleted 16y ago[deleted]
- bl4k 16y agoMike tends to push posts out as he develops the story (eg. the Scamville saga) so expect this to be the first of many posts. When he picks up a story like this, watch out - Scamville didn't end until Offerpal lost their CEO, Zynga apologized and Facebook changed their policies.
- deleted 16y ago[deleted]
- MediaSquirrel 16y ago@icey: can u change the title to something that explains the nature of the post? Something like "Super-Angels Colluding to Keep Valuations Down." I know u just kept the original headline, but it's confusing for people who haven't read the post. Just a request. 'Tis a VERY important thing for all to read in the community.
- iamwil 16y agoPeople should read posts before they comment. Besides, I think the top post usually gets clicked on, especially if it has a weird title. "What's all the buzz about?"
- johns 16y agoJust a request. Can you spell your words out if you're over the age of 13?
- deleted 16y ago[deleted]
- icey 16y agoI changed it to add "[Allegations of investor collusion]", but then I changed it back because it looked weird. PG or one of the mods can modify the headline if it needs clarity; I generally prefer to use whatever the post title is.
- jnoller 16y agoI do hope he's wrong, or that this a mistake of some sort. The rise of Angel investors has seen a lot of ideas and entrepreneurs get needed money when they might not have under the traditional VC model. Something like this, if true, will cause the government to step in, and probably regulate and change things for the worse for a great many people. It won't just hurt these few super angels. It will take everyone with it.
- MediaSquirrel 16y agoI believe the saying that applies is: "Power corrupts..."
- cool-RR 16y agoI wouldn't take anything he says seriously. [Edit: If it wasn't clear, I meant Arrington, not Jesse]
- lsternlicht 16y agoI think your statement was clear. However, I find it hard to believe Arrington would put some of his best sources at risk if his claims were completely unfounded.
- onan_barbarian 16y agoStrange how any post that could be construed as being negative about Arrington gets down-modded by about 5 points, regular as clockwork. That being said, I think he's on the money with this one. This can only be good for YC overall. The suspicion that YC alternatives are all colluding against your startup is likely to make YC seem more attractive still, to the class of startup that would be wavering between YC and a rival.
- ericd 16y agoSuper angels aren't really an alternative to YC... they normally step in at the stage a company is at where YC normally ends.
- 16y ago
- potomac 16y agoruh roh
- tptacek 16y agoIn what sense do antitrust laws apply to investors? Why is it unlawful for investors to band together to get better terms for themselves? Wouldn't it be perfectly legal for these people to sit around a table an agree to merge and start a fund? If that's the case, how could it be unlawful for them to work on a joint venture? Just because I don't like the JV doesn't make it unlawful!
- jnoller 16y agoI'd like to know the laws too, this could be construed as collusion, conspiracy and probably a few other things.
- tptacek 16y agoHow? What market power are they exploiting? There's no conceivable monopsony for "shares of all startups".
- jnoller 16y agoThey are a group of people supposedly conspiring to generate the worst possible terms for the people they are providing money to, while trying to force out or marginalize competition. IANAL though - even if not illegal, it's still pretty stinky, and a big part of me hopes it's not illegal. If it's not illegal, I hope they're outed and shamed if this is true. If it is illegal, it give the government reason to step in and screw everything up.
- tptacek 16y agoOr, this is a group of people collaborating to generate the best possible outcome for their own business. Every joint venture can be framed in anticompetitive terms. But in this case, what possible undue market influence can they have? The market will find other people to take these deals.
- dschobel 16y ago
- dotBen 16y agoThere's only half the story here because Arrington isn't naming names. It was a meeting of a group of people in a semi-public place, I don't see why he hasn't named who was there: "So, I went into the restaurant to find Dave, Ron, Jeff, Mike, Josh, Chris, ..." (I'm just naming, um, random first names here folks for the purpose of illustration!) He's clearly running a power play around the identities...
- kareemm 16y agoer, because he wants to maintain relationships with his friends who were around the table?
- guelo 16y agoOne of the major nono's of journalism is becoming too close to your sources.
- chollida1 16y ago> One of the major nono's of journalism is becoming too close to your sources. Another one would be "don't out your sources". Which he would have done if he had of named names.
- megablast 16y agoMaybe one day you will figure out the difference between coming "too close", and dropping peoples names at the first sign of a story. Maybe.
- AmericanOP 16y agoBecause Dave, Ron, Jeff, Mike, Josh and Chris would have a defamation suit filed by end-of-day. Clearly MA reached out to the attendees.. I wonder what the other 8 or 9 had to say. That's the other half of the story.
- dotBen 16y agoIf Arrington lists a bunch of people were at a gathering, and they were, then there is nothing to sue over there. If he says "they were talking about pricing deals and how to club together to avoid convertable notes", and they were, then there is nothing to sue over even if he has named the people there. I don't actually get your comment. If we DON'T believe this group were talking about what Arrington is claiming then there is a bigger issue here regardless of whether people were named or not.
- danielnicollet 16y agoThis is major. I worked with Michael Arrington years ago. He wouldn't say this without being sure and there is no stopping him now. He went to Stanford Law School and worked at one of the Valley's top law firms (wsgr.com). Mike, get ready for the witness stand!
- bcroesch 16y agoNot saying that he's wrong, but does it seem odd to anyone else that a group of people who are clearly very smart and successful would create a wiki to document their illegal scheme of collusion and price fixing?
- deleted 16y ago[deleted]
- AmericanOP 16y agoOn the flip side, are valuations becoming over-inflated? I also think it's entirely appropriate for this group to be discussing strategies to increase their competitiveness versus YC, newcomers, and VCs. The real sinister claim is that they were talking about "more mundane things, like agreeing as a group not to accept convertible notes in deals." I wonder how that will pan out now.
- iamwil 16y agoThe way to combat over-inflation is to simply not buy. You don't need a secret meeting for that. When investors aren't buying, that's a collective signal to founders selling that their valuations are too high.
- seiji 16y agoI bet it's people leaking fake conspiratorial meetings just to screw with Arrington. We need more information though. Were there any, ahem, cons there? How about any balding acebookfay employees? Were there fewer, greater than, or exactly 500 hats in attendance? Was there anybody there using saccharin? Did your spy camera catch theone?
- deleted 16y ago[deleted]
- deleted 16y ago[deleted]
- chaosmachine 16y agoThere's a quote I can't quite remember. Goes something like: "When merchants meet to discuss business, the public is rarely the beneficiary".
- asr 16y agoWas it the Adam Smith quote "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public." Why do I know that off the top of my head? Civ IV... who says games can't be educational?
- chaosmachine 16y agoThat's the one, thanks. Good old Civ :)
- StavrosK 16y agoIn unrelated news, I am waiting for Civilization 104: Civ CIV
- deleted 16y ago[deleted]
- aaronbrethorst 16y agoas asr points out, hooray for Civ IV! http://www.squidoo.com/civ4quotes http://www.squidoo.com/civ4quotes "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public." - Adam Smith
- jiganti 16y agoIt's too early to write this blog post. Arrington tried to manufacture a happy medium between not saying anything and outing every person at the meeting. Not outing everyone implies you're not entirely sure. Not being entirely sure, yet talking about it anyway is a cheap way to get a story. Waiting until things are more clear cut would have earned him points in my book- I suppose it's not worth it when the alternative is having everyone follow the story on TC from now until its conclusion.
- jexe 16y agoI'm assuming he's trying to both get a good scoop AND stop the damage these angels can do to startups - the longer he waits, the more damage might be done. I think he's struck a pretty good balance here by saying what needs to be said and no more, while still keeping it interesting.
- deleted 16y ago[deleted]
- Uhhrrr 16y agoThis is a terrible monopoly, because all "ten or so" angel investors are involved.
- tav 16y agoAnyone know if anything similar is happening in London/UK? Collusion is to be expected in all industries, but something of this scale — if true — just blows the mind.
- jexe 16y agoWell, at least one investor seems to have accidentally included himself in the mess (from TC's comments) http://twitter.com/speechu/status/25083299594 http://twitter.com/speechu/status/25083299594
- nostromo 16y agoI just put "forming a cartel" on my list of things not to tweet.
- mattmaroon 16y agoUnless you're in Mexico. Then Tweeting is probably a good idea.
- ojbyrne 16y agoIf I had some energy (and cared) I'd be on foursquare and gowalla right now ;-)
- dannyr 16y agoThe tweet has been erased but somebody did an old-school retweet of it. "Timestamp is 8p yesterday. RT @speechu: Bin 38 is like heaven right now, chock-full of angels. #superevil #evidence cc @arrington" http://twitter.com/mattmireles/status/25159683448 http://twitter.com/mattmireles/status/25159683448
- pbiggar 16y agoIt's 404 for me. What did it say? (screenshot preferred)
- dannyr 16y agoCached version: http://cc.bingj.com/cache.aspx?q=http://twitter.com/speechu/status/25083299594&d=838639814940&mkt=en-US&setlang=en-US&w=4fc81e4b,6fbc5d18 http://cc.bingj.com/cache.aspx?q=http://twitter.com/speechu/...
- hanskuder 16y ago
- matt1 16y agoBut the conversation has evolved to the point where these super angels are actually colluding (and I don’t use that word lightly) to solve a number of problems, say multiple sources who are part of the group and were at the dinner. Given Arrington's allegations, why would someone in the group or at the dinner admit to the collusion? These are smart guys talking to a prolific, ballsy blogger--what do they expect will happen? What's in it for them? At least two people attending were extremely uneasy about the meetings, and have said that they are only there to gather information, not participate. It also strikes me as odd how specific he is when mentioning figures. Why not simply say, "Several people who attended the meeting..."? By specifically saying that there were two, he will have everybody who was there guessing who those two are. Also, if there was just one person, it would make sense for him to specify that there were two to throw off the rest of the group, no?
- BrandonM 16y ago> why would someone in the group or at the dinner admit to the collusion? He mentioned that they were uneasy with the direction the talks had taken. I could definitely understand a couple of them seeing this admission as a good way to get out of a compromising situation while not leaving themselves at the disadvantage of being an outsider.
- achalmers 16y agoI wouldn't be surprised if that's the last we hear of this story; very unlikely Arrington will name drop in the future. However, if this story is true, hopefully it scares off these Angels from forming an investment 'mafia.'
- vessenes 16y agoI disagree -- I can't imagine that Arrington will hold those names back. He's a journalist first, and increasingly, what seems to be a sort old school one -- he's there for the story. Right now, there's no need to drive traffic with names -- he's got today's scoop. Give him time.
- deleted 16y ago[deleted]
- siglesias 16y agoGame theory. 10 players make for a highly unstable equilibrium, especially given the potential for absurdly high profits for deviating to fund one hot company. One of them is even "highly uncomfortable." The key is to shop around and negotiate intelligently.
- ancornwell 16y agoI bet that one uncomfortable person is also the wealthiest. Greed will never allow investing to become anything close to a cartel.
- SkyMarshal 16y agoThere's also the game theory going on within the 10. The one uncomfortable person could have gathered data and evidence on the scam while dragging their feet in participating, then informed to the FBI, gotten their main competitors shipped off to prison, and been the only Superangel left in the game with the pick of the litter and their choice of valuations.
- tptacek 16y agoThis thread officially needs a 'grellas bat-signal.
- mixmax 16y agoSo a blogger gets a tip from a source, knows the people involved, acts on it and smells a rat. He sticks around and talks to a few people he knows, makes a few calls and gets a breaking story. Sounds to me like bloggers are the new journalists and that traditional media is in big big trouble.
- deleted 16y ago[deleted]
- sachinag 16y agoFelix Salmon does this, and he's a blogger working for Reuters. Dan Primack does this, and he's a blogger working for Fortune. It's not about old/new media - it's about hustle.
- deleted 16y ago[deleted]
- Alex3917 16y agoRead Manufacturing Consent or any of the books that have been written about the MSM since then. It's very much about old media verse new media. If this were the NYT they'd probably tell Arrington he couldn't run the story because it'd interfere with either their ad sales or else their access to sources. For example, just look at how/why they covered up their knowledge of the warrantless wiretapping until after Bush got reelected. Whereas with Arrington there's no one to tell him he can't do it because it's his blog, and because he's not part of some mega corporation the chances of a story like this killing the revenue of some part of his empire are infinitely lower.
- vaksel 16y agoa breaking story would name names...him not naming names just means he can use this as a hammer to get better terms for Techcrunch(either I get exclusive to every deal you guys do...or your names will be posted)
- metamemetics 16y ago
- brudgers 16y agoMajor players in the industry are reshaping it. One says "I'm uncomfortable." Another says "I subscribe to Playboy for the articles." So Arrington doesn't name names. Fortunately, everyone is now shamed to ethical conduct.
- deleted 16y ago[deleted]
- 3pt14159 16y agoLets file a class action lawsuit naming the top ten (virtually 100% eh?) super angels then call Michael as a witness. The case is simple: price fixing led to lower sized deals and higher valuations. I almost never advocate lawsuits, but in this case it is totally justifiable. Just for the record, I'm actually not against collusion and price fixing as an idea (I believe that eventually market forces will correct it), but I'm against it if it is illegal because the market should be able to trust that laws are enforced. Sue the bastards for billions worth of equity.
- staunch 16y agoI could have guessed that http://paulgraham.com/future.html http://paulgraham.com/future.html would have scared quite a few traditional VCs. I'm surprised that it scares the big angels so much.
- madridorama 16y agoI'm not surprised by the accusation, but I have about as much trust in TechCrunch as I do in a general soothsayer
- fdeth 16y agoScrewing over entrepreneurs on the seed stage is just evil. Gordon-Gekko-evil.
- charlief 16y agoImpeccable timing, Wallstreet 2 comes out in 2 days
- danielnicollet 16y agoObviously, this came out an hour ago because Arrington (despite being a trained lawyer himself) spent the day and maybe last night also (knowing him) checking with lawyers about what to write, how to write it, when to release it, etc. Good luck on the witness stand Michael!
- joshu 16y agoFrom the comments: > No self-respecting conspiracy uses a wiki (or even email). I laughed.
- mrshoe 16y agoWere you in the room?
- qq66 16y agoI don't think that Joshua Schacter is a "super angel" as the TC post uses the term.
- joshu 16y agoI'm not even a medium angel.
- davidrheal 16y agoI'm willing to overlook that.
- bl4k 16y agoHere is something to consider. You have said yourself that as an angel you prefer to follow deals, rather than set the terms. A lot of angel investors are like that. The problem is that the guys who lead the rounds and set the terms are fixing the market. While there may be hundreds of angel investors out there, the reason why only 10 of them can rig the market in this way is because most of them, like yourself, are followers. How about the 90% of the other angels step out and actually lead some deals and price them, so that we have a real investment market at the seed stage.
- joshu 16y agoThe trend lately is toward convertible notes issued by the startup itself. This means that nobody is leading and nobody is pricing the deal. There are plenty of other people (VCs, basically) that do lead, when there is a leader. It's just much rarer right now. And the stronger deals, not the weaker ones, tend to be lead; those are the deals where the entrepreneur has the most leverage, not the weakest. I don't get the impression that anyone is fixing the market, for what it's worth. But thanks for the outrage and accusations.
- nchlswu 16y agoI don't understand how people like this (if the points I'm referring to are truthful, of course) can not maintain some composure. Guilty silence and a "oh no no" from somebody considered as a friend is a bit ridiculous. I'm searching for the right words right now, but it's sort of ridiculous that Angels like this who have undoubtedly relied on their networking end up handling a situation like this. A bit amateurish, no?
- moe 16y agoA bit amateurish, no? That scene could be straight from the script of a rather poor B-Movie... I find it hard to imagine a group of grown up investors behave like that.
- noahth 16y agoi was thinking the same thing. not ONE of them managed to get his wits together and say something to make it look at least a teensy bit less suspicious? seems like it would have been prudent to have even just a bit of a cover story prepared, considering how easy it is to bump into other folks in the industry at any time at any place within the city.
- herdrick 16y agoMichael Arrington is impressively gung-ho, and I admire him for it, but is this big news? See point #16 here: http://www.paulgraham.com/guidetoinvestors.html http://www.paulgraham.com/guidetoinvestors.html
- johnglasgow 16y agoThe real scare for these angels is if entrepreneurs lose trust in them, because then they will start losing out on the hottest deals.
- jessep 16y agoThere's a comment on Techcrunch that I found particularly interesting: http://techcrunch.com/2010/09/21/so-a-blogger-walks-into-a-bar/#comment-79846761 http://techcrunch.com/2010/09/21/so-a-blogger-walks-into-a-b... "This group does not have a monopoly position in early stage deals. So getting together to discuss how they as individuals/small firms can better compete against much larger VCs and incubators is not price fixing or collusion." It continues on to expand nicely on the point.
- _delirium 16y agoIs a monopoly even needed? In most fields I thought it was illegal even if only a few businesses in a market get together, e.g. if a dozen gas station owners in my area got together to discuss coordinating price strategy, that'd be illegal, even though those 12 hardly own the whole market. Though there are legal ways to do it if you aren't actually discussing setting prices, e.g. all the local bakers' shops can get together to discuss difficulties in the current market for baked goods, how to better promote the sector, etc., so long as they aren't working out how to collude in negotiating with their suppliers, or agreeing to minimum prices for bread, or things of that sort.
- bhoung 16y agoAs a former competition regulator, I have to say this blog post is a beauty, in content. Making such a serious accusation, albeit one that is very difficult to prove, especially when the accusation is towards your friends is a gutsy/crazy move. This pretty supports PG's prediction that the power is shifting towards founders and startups when raising capital from VCs. Hopefully, this diffuses any further action on the part of the investors. It may be time for a career change...
- deleted 16y ago[deleted]
- tc 16y agoCongratulations to PG & company. When I first met Paul years ago, he was musing about spam filters and the finer points of a well-designed lisp. Now he apparently has the top 10 angels in Silicon Valley running scared of him.
- jeromec 16y agoThe interesting thing is unlike that group of Angels apparently in the bar PG's interests are less about helping himself, and more about helping entrepreneurs. From an essay by PG entitled "Why YC": The real reason we started Y Combinator is one probably only a hacker would understand. We did it because it seems such a great hack. There are thousands of smart people who could start companies and don't, and with a relatively small amount of force applied at just the right place, we can spring on the world a stream of new startups that might otherwise not have existed. In a way this is virtuous, because I think startups are a good thing. But really what motivates us is the completely amoral desire that would motivate any hacker who looked at some complex device and realized that with a tiny tweak he could make it run more efficiently. In this case, the device is the world's economy, which fortunately happens to be open source. http://paulgraham.com/whyyc.html http://paulgraham.com/whyyc.html
- qq66 16y agoI don't think anybody's stated interests should be taken as an indicator of their true interests. In this case, with PG, I do believe that his stated intentions are sincere. But there is often so little correlation between actual and stated intentions, that I don't take any such statement at face value.
- jeromec 16y agoI don't think anybody's stated interests should be taken as an indicator of their true interests. I agree. (actually I'd replace "taken as an indicator" with "taken as an absolute indicator") In this case, with PG, I do believe that his stated intentions are sincere. I agree.
- deleted 16y ago[deleted]
- grellas 16y agoI am late in joining this thread and will add only a few observations to supplement the many good comments already here: 1. Competitor collusion and express agreements to restrict the freedom of each to compete (i.e., horizontal contractual dealings) do indeed expose the colluding parties to potentially serious liabilities under the Sherman and FTC Acts. If that is what is going on here, then Mr. Arrington has fired a major warning shot to those involved asking, in effect, "are you insane to let yourselves get caught up in this sort of activity?" 2. The irony here is that competitors are completely free to have contacts with one another, to discuss industry problems, and even to work on solutions for how best to handle such problems, provided that such contacts aren't made for an anti-competitive purpose. This is how trade associations work, among other things, and angel investors can and do meet all the time to discuss common issues and problems. Such benign meetings and contacts are very different from colluding to restrict their ability to compete freely in the marketplace through agreements to suppress valuations, etc. 3. Parallel action by competitors is in itself normally quite harmless and does not subject them to liabilities (for example, the fact that angel investors tend to use common sets of investment documents, tend as a group to dislike convertible notes, etc.). Companies having nothing to complain about legally from the fact that a particular angel investor happens to engage in practices in common with others in the industry that founders happen not to like. All this changes, though, if the competitors (i.e., the angel investors) have engaged in suspicious activities such as secret meetings among themselves to discuss overt ways to limit competition, etc. 4. Nothing under the law stops any one of these angel investors from deciding as a business matter to form a new fund along with others of such investors and to engage through that fund as a competitor in the venture financing industry. In such case, the investors are no longer competitors and have simply combined forces to compete as a different entity in the industry. If, however, the parties effectively remain competitors and simply form a jointly controlled venture whose aim is to serve as a vehicle by which they might collude in suppressing competition, that vehicle would be unlawful. Putting all this together, the normal give and take among the myriad angel investors in the Valley and elsewhere is lawful and beyond reproach, even when they do meet to discuss problems. Meetings in a smoke-filled room as part of concerted efforts to restrict normal competitive activities by the participants, on the other hand, are almost blatantly illegal on the face of it and especially so when the participants are among the most prominent players in the industry. It may well be that some or most of these participants hadn't really realized that they were moving from the benign to the illegal in participating in such meetings over time, and this is where it seems that Mr. Arrington is doing a good turn for them by calling them out before they do something that is irretrievably wrong. Just speculating on this last point but that is how the tone of the piece strikes me.
- brisance 16y agoSomeone please explain the finer nuances of the law; I can't see how this is different from professional athletes forming their own association/union and stipulating a "minimum fee" e.g. NBA.
- bl4k 16y agothe NBA and other sporting leagues are exempt from anti-trust laws in the USA. They get a free pass from the gov: http://www.thesportjournal.org/article/role-antitrust-laws-professional-sports-industry-financial-perspective http://www.thesportjournal.org/article/role-antitrust-laws-p...
- ArturSoler 16y agoThat makes it different as law is concercened, but one is as legit as the other.
- alanh 16y agoCan an admin re-title this link? “Arrington Alleges SF Angel Collusion” or some such?
- lizzy 16y agoThere is a Quora thread for tracking who was there: http://qr.ae/EC7 http://qr.ae/EC7
- Devilboy 16y agohttp://www.quora.com/Who-are-the-Super-Angels-that-Michael-Arrington-is-talking-about-in-his-9-21-10-Techcrunch-post-So-a-Blogger-Walks-into-a-Bar http://www.quora.com/Who-are-the-Super-Angels-that-Michael-A...
- jwerlin 16y agoView from one entrepreneur's seat: 1. Super Angels networking is expected, allegedly sharing deal terms (convertible notes, etc.) and allegedly working together to try and lower valuations is definitely not representative of a healthy 'free' market. 2. Singling out a successful model and trying to replicate it and improve upon it isn't horrible, but allegedly singling out one entity (YC) trying to limit something inherently doing good by entrepreneurs is horrible. 3. Good or bad / legal or illegal, if this episode results in any increase of government regulation/oversight in any way for funding at this level then both sides lose. 4. This entire episode, for me, reinforces the need for start ups to go bootstrap, achieve revenue and profitability and then, if funding is proved to be needed down the road, go in with a stronger hand when you sit across the table from any funding source.
- budu3 16y agoWhy do Angels hate convertible notes so much?
- tlb 16y agoConvertible notes allow founders to close angel deals one at a time with varying valuations. It makes it much easier for small angels to compete with big angels. The old practice of stock issuance required a big angel to make the whole deal happen, and they could dictate terms. Now, big angels are losing their advantage over small angels. I understand why they're unhappy, but I encourage them to compete fairly on their merits rather than anything anti-competitive.
- SkyMarshal 16y agoIs Y-Combinator not considered a super-angel? Arrington says the superangels at the meeting comprise almost 100% of early stage startup funding, but PG wasn't there. What's YC then?
- gruseom 16y agoThe difference is that YC get in before these guys do. Edit: I think there's another difference too: YC is significantly more founder-friendly. Just like angels have traditionally been more founder-friendly than VCs.
- SkyMarshal 16y agoThanks, from reading alot of the comments it sounds like Incubators like YC take startups from nothing to working product/proof of concept, then Angels step in and get them to the VC phase.
- gruseom 16y agoI find it fascinating how the very qualities that lead people to call Michael Arrington an asshole are dramatically in evidence here. It takes a staggering immunity to social mores to walk in on a meeting of rich and powerful friends, friends who are connected to his own business in many ways (read: friends with leverage) and behave the way MA says he did, let alone go home and write that article. Very few people could do it. I'm not sure I could, to put it mildly. I particularly doubt if many (any) of Arrington's competitors ever would. It may take a character disorder to be able to act this way. In an age when journalists grade themselves by which power-brokers deign to have lunch with them (anybody see David Brooks prattling about this on Charlie Rose the other night? lunch and dinner, he said) it's impressive to see anyone act like this. Especially if what he's saying is true and this really is a matter of right and wrong.
- mrtron 16y agoI have always felt MA had a certain...brashness, abrasiveness, assholish tone, whatever you want to call it... about him. You could feel it in his articles. I now feel it is not only helpful but entirely necessary for him to develop that quality in his career path. Kudos for pushing the boundaries Mr. Arrington. The evidence speaks for itself - you don't see this type of journalism in any industry anymore.
- marcamillion 16y agoThis is so disappointing. Firstly, I am glad Mike called them out. Took a lot of cajones to do it, and say what you will about TC and Mike...stumbling across something like this and not shutting up takes major balls. Secondly, here I was rooting for these 'Super Angels' to finally revolutionize the VC industry and send the 'old guard' packing by better understanding the founders (not just talking a good game). Turns out that they are all the same. I would not be surprised if this further turns founders off of taking angel money altogether and deciding to just get to profitability as quickly as possible - further shifting the funding tide in the founders direction...which weeds out a good amount of these 'Super Angels'. Either way, I suspect there is a shake-out coming. Thanks Mike.
- sahillavingia 16y agoThere are times where the actions of Michael Arrington make me hate him. And times where I forget all that and appreciate his integrity. Posts like this keep TechCrunch afloat. Good job.
- grandalf 16y agoIt's important not to get too caught up in the legal technicalities. A strong startup (ideas/execution) still has tons of market power, no matter what a secret group of super-angels agree to do behind closed doors. And, most importantly, bootstrapping is more feasible than ever and (as noted) YC is coming on strong.
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- points 16y agoWho cares? TL;DR; Some investors meet up and discuss things.
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- lefstathiou 16y agoIt's moments like these that I deeply, humbly and profoundly love and appreciate the internet and everything and everyone that makes it work.
- jacquesm 16y agoSee http://news.ycombinator.com/item?id=1715840 http://news.ycombinator.com/item?id=1715840 for Dave McClure's (one of those present) response to these allegations.
- ThePlague 16y agoIssues of price fixing by a group of investors tease at the difference between "mainstream conservative" and "libertarian". A "mainstream conservative" will probably want to have laws in place against price-fixing schemes which can hurt the small business owner/entrepreneur type person because small business is integral to economic stability/growth for the mainstream conservative (like a Jack Kemp, etc.). A hard-core libertarian (Ayn Rand, for instance) would be opposed to any regulations even those against practices which could hurt the entrepreneur. Because whereas in a "conservative ecosystem" the majority of hiring, etc. comes from small business/"main street" or whatever, in a "libertarian/John Galt ecosystem" most of the hiring is done by, you guessed it, John Galt. My point is, a mainstream conservative (a more moderate type) has an interest in preventing price-fixing and helping the small-time businessman whereas the libertarian does not. Therefore, "pro-business" means different things to different people. Pro-small-business (mainstream or moderate conservatism) is different or not always the same at any rate from being pro-big-business (libertarian/Objectivist). Thus, for example Gov. Romney would probably want to keep a lid on price-fixing which hurts mainstreet, while say Rand Paul would not. This is a great topic to tease out the nuances between various so-called "pro-business" or "conservative" viewpoints. Who's right? Who knows, but it is certainly instructive.
- paramendra 16y agoMike Arrington is selling newspapers. http://goo.gl/fb/PpyhK http://goo.gl/fb/PpyhK