Angelgate is a controversy[1] surrounding allegations of price fixing and collusion among a group of ten angel investors in the San Francisco Bay Area.[2]
Emergence
The issue
The scandal began in September 2010 after Michael Arrington, editor of the TechCrunch publication, wrote in his blog that he had been turned away from a secret meeting among so-called "super angels" he knew,[3] held at Bin38, a wine bar in San Francisco's Marina District.[4] The participants at the meeting, among other things, discussed how they could compete with other angels, venture capitalists, and the Y Combinator business incubator for the limited pool of worthy investment opportunities.[5] Arrington said that after the meeting, he had been informed by two of the attendees that the investors had discussed how to fix low valuations for new start-up companies, and how to keep better-funded venture capitalists from investing.[6]
The blog became the subject of discussion among the Silicon Valley start-up community over the next several days.[7][8] Investor Ron Conway, whose business partner attended the meeting, wrote an email highly critical of the angels involved and called the event "despicable and embarrassing".[9] Dave McClure, a well-known angel present at the event,[7] wrote in a blog that Arrington's account was inaccurate, and a tweet (later deleted) complaining about Conway.[10] Chris Sacca wrote a lengthy email that defended the participants and was critical of Conway, which was also leaked to TechCrunch.[11]
Aftermath and critique
Reports arose that the United States Federal Bureau of Investigation began reviewing the incident.[12]
There was skepticism that there was actually any collusion or that price fixing could succeed if it was attempted.[1][13][14] The event also gave rise to various online cultural phenomena. Among other things there was a flash mob at the wine bar, a Hitler Downfall parody, a spike in the establishment's Google rank, a number of Twitter jokes,[4] and so-called "fakeplans" for super-angel meetups on the site plancast.com.[7] On Monday, September 27, 2010, Ron Conway, Dave McClure, Chris Sacca, and others appeared at a panel discussion hosted by Arrington at his "TechCrunch Disrupt" conference in San Francisco[15][16] where, despite Arrington's prodding, they avoided a "Jerry Springer moment".[17]
References
External links
- "A blogger walks into a bar" - Arrington's blog entry
- Subject: Super Angels Gathering - Ron Conway's letter (reproduced in TechCrunch)