6 ms·

I'd like to know the laws too, this could be construed as collusion, conspiracy and probably a few other things.

by jnoller 16y ago

tptacek 16y ago
How? What market power are they exploiting? There's no conceivable monopsony for "shares of all startups".
- jnoller 16y ago
  They 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 ago
    Or, 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
      That's an unrealistically high standard and I can't think of any recent case which would meet it. Why didn't the market find a solution to Microsoft in the 90's or Intel in 2000's and, more importantly, why did the Feds feel the need to intervene?
      - tptacek 16y ago
        Microsoft owned the entire personal computing platform and was using it to put new companies in marginally related markets out of business. Are you suggesting that 10 angel investors have control over all the money? Is one of them Lex Luthor?
        dschobel 16y ago
        I'm not suggesting it, Arrington flat out said it. He was there and knows the VC players better than anyone.
        blueben 16y ago
        Because bay area technical angel investing isn't just about writing cheques. It's about managing and guiding those startups, helping them find the resources they need. It's about leveraging your connections throughout the industry to help them grow sales, build manufacturing, hire talent, or any of a hundred other things. This is why startups go back to these handful of investors over and over again. Founders aren't stupid. They know these investors wield serious power in the tech world, and they want that power to be on their side. If you think the only requirement to being an angel investor is having a big bank account, you haven't been paying attention.
    - jnoller 16y ago
      This is a group of people, comprising the top angel investors in a given area, investing lots of money, into a lot of companies, supposedly discussing - in private - how to "divide the market" and "set prices" and "exclude/marginalize competition". Angel investors, despite being individuals, still have regulations and laws to follow. Frankly, I think the feds would jump at the chance to have an excuse to jump in and more tightly regulate/tax/etc the entire system, including angel investors. You could very well be right; admittedly, I'm not the smartest tool in the shed when it comes to understanding FTC and government investment regulations, as well as the legal status of angel investors. Heck, I really hope this is all wrong, because the last thing I want is the feds meddling in this industry even more. I make my living on startups; the last thing I want is the federal government to make it wither and die.
    - j_baker 16y ago
      "Every joint venture can be framed in anticompetitive terms." Semantically yes. But is every joint deal bad for the market? "The market will find other people to take these deals." Don't be naive. Anticompetitive practices are specifically meant to prevent the market from functioning normally.
    - notahacker 16y ago
      If (i)most angel investors are significantly less likely to make investments in early stage tech startups at a given price and/or (ii)due to connections these investors provide a significant non-monetary value-add to the startups they invest in then it's conceivable they might wield a significant amount of market power.

I'd like to know the laws too, this could be construed as collusion, conspiracy and probably a few other things.

by jnoller 16y ago

I'd like to know the laws too, this could be construed as collusion, conspiracy and probably a few other things.

tptacek 16y ago

How? What market power are they exploiting? There's no conceivable monopsony for "shares of all startups".

jnoller 16y ago
They 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 ago
  Or, 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
    That's an unrealistically high standard and I can't think of any recent case which would meet it. Why didn't the market find a solution to Microsoft in the 90's or Intel in 2000's and, more importantly, why did the Feds feel the need to intervene?
    - tptacek 16y ago
      Microsoft owned the entire personal computing platform and was using it to put new companies in marginally related markets out of business. Are you suggesting that 10 angel investors have control over all the money? Is one of them Lex Luthor?
      - dschobel 16y ago
        I'm not suggesting it, Arrington flat out said it. He was there and knows the VC players better than anyone.
      - blueben 16y ago
        Because bay area technical angel investing isn't just about writing cheques. It's about managing and guiding those startups, helping them find the resources they need. It's about leveraging your connections throughout the industry to help them grow sales, build manufacturing, hire talent, or any of a hundred other things. This is why startups go back to these handful of investors over and over again. Founders aren't stupid. They know these investors wield serious power in the tech world, and they want that power to be on their side. If you think the only requirement to being an angel investor is having a big bank account, you haven't been paying attention.
  - jnoller 16y ago
    This is a group of people, comprising the top angel investors in a given area, investing lots of money, into a lot of companies, supposedly discussing - in private - how to "divide the market" and "set prices" and "exclude/marginalize competition". Angel investors, despite being individuals, still have regulations and laws to follow. Frankly, I think the feds would jump at the chance to have an excuse to jump in and more tightly regulate/tax/etc the entire system, including angel investors. You could very well be right; admittedly, I'm not the smartest tool in the shed when it comes to understanding FTC and government investment regulations, as well as the legal status of angel investors. Heck, I really hope this is all wrong, because the last thing I want is the feds meddling in this industry even more. I make my living on startups; the last thing I want is the federal government to make it wither and die.
  - j_baker 16y ago
    "Every joint venture can be framed in anticompetitive terms." Semantically yes. But is every joint deal bad for the market? "The market will find other people to take these deals." Don't be naive. Anticompetitive practices are specifically meant to prevent the market from functioning normally.
  - notahacker 16y ago
    If (i)most angel investors are significantly less likely to make investments in early stage tech startups at a given price and/or (ii)due to connections these investors provide a significant non-monetary value-add to the startups they invest in then it's conceivable they might wield a significant amount of market power.