Angelgate

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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

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  1. ^ a b Page Module:Citation/CS1/styles.css has no content.Alexei Oreskovic (September 22, 2010). "Investor conspiracy theory grips Silicon Valley". Reuters.
  2. ^ Page Module:Citation/CS1/styles.css has no content.Mangalindan, JP (September 29, 2010). "Angel collusion: It's not necessarily a bad thing". Fortune Magazine.
  3. ^ Page Module:Citation/CS1/styles.css has no content.Russell Garland (September 24, 2010). "The Daily Start-Up: "AngelGate" Escalates". Wall Street Journal.
  4. ^ a b Page Module:Citation/CS1/styles.css has no content.Paolo Lucchesi (September 24, 2010). "AngelGate meeting scandal gives Bin 38 lots of free publicity, punchlines, and a Hitler parody". San Francisco Chronicle.
  5. ^ Page Module:Citation/CS1/styles.css has no content.Neyfakh, Leon (September 28, 2010). "Paul Graham of Y Combinator Pulls Back the Curtain on What Goes On At His Start-Up Factory". New York Observer. Archived from the original on October 3, 2010.
  6. ^ Page Module:Citation/CS1/styles.css has no content.Jameson Berkow (September 23, 2010). "The secret rulers of Silicon Valley". National Post.
  7. ^ a b c Page Module:Citation/CS1/styles.css has no content.Maggie Shiels (September 23, 2010). "'Angelgate': A tech conspiracy?". BBC. Archived from the original on September 25, 2010.
  8. ^ Page Module:Citation/CS1/styles.css has no content."After Quiet Dinner, Angels Get Indigestion". New York Times. September 22, 2010.
  9. ^ Page Module:Citation/CS1/styles.css has no content.Patrick Hoge (September 23, 2010). "Ron Conway slams 'super angels' hard". San Francisco Business Times.
  10. ^ Page Module:Citation/CS1/styles.css has no content.Ryan Singel (September 24, 2010). "Showdown! Angels, Arrington to Go Mano a Mano". Wired Magazine. Archived from the original on September 28, 2010.
  11. ^ Page Module:Citation/CS1/styles.css has no content.Michael Arrington (September 26, 2010). "AngelGate: Chris Sacca Responds To Ron Conway". TechCrunch. Retrieved 5 June 2013.
  12. ^ Page Module:Citation/CS1/styles.css has no content.Patrick Hoge (September 23, 2010). "FBI reportedly looking into Angelgate". San Francisco Business Times.
  13. ^ Page Module:Citation/CS1/styles.css has no content.Dan Primack (September 22, 2010). "Super-angels have dinner, all hell breaks loose". Fortune Magazine.
  14. ^ Page Module:Citation/CS1/styles.css has no content.Alex Salkever (September 24, 2010). "AngelGate or Not, Controlling the Market in Hot Startups Is Impossible". Daily Finance.
  15. ^ Page Module:Citation/CS1/styles.css has no content.Nitasha Tiku (September 27, 2010). "How Michael Arrington's School of Friendship Journalism Led to 'AngelGate'". New York Magazine.
  16. ^ Page Module:Citation/CS1/styles.css has no content.Tomio Geron (September 27, 2010). "'AngelGate' Players Come Face To Face, But Fireworks Are Few". Wall Street Journal.
  17. ^ Page Module:Citation/CS1/styles.css has no content.Jessica Guynn (September 27, 2010). "'AngelGate' disrupts TechCrunch conference but no 'Jerry Springer' moment". Los Angeles Times.
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