Angelgate Explained

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]

External links

Notes and References

  1. News: Investor conspiracy theory grips Silicon Valley . September 22, 2010 . Alexei Oreskovic. Reuters.
  2. News: Fortune Magazine. Angel collusion: It's not necessarily a bad thing. JP. Mangalindan. September 29, 2010.
  3. News: Wall Street Journal. The Daily Start-Up: "AngelGate" Escalates. September 24, 2010. Russell Garland.
  4. News: San Francisco Chronicle. AngelGate meeting scandal gives Bin 38 lots of free publicity, punchlines, and a Hitler parody.. Paolo Lucchesi. September 24, 2010.
  5. News: Paul Graham of Y Combinator Pulls Back the Curtain on What Goes On At His Start-Up Factory . Leon . Neyfakh . September 28, 2010 . New York Observer . dead . https://web.archive.org/web/20101003031222/http://www.observer.com/2010/media/paul-graham-y-combinator-pulls-back-curtain-what-goes-his-start-factory . October 3, 2010 .
  6. News: National Post. The secret rulers of Silicon Valley. September 23, 2010. Jameson Berkow.
  7. News: BBC. 'Angelgate': A tech conspiracy?. Maggie Shiels. September 23, 2010.
  8. News: New York Times. After Quiet Dinner, Angels Get Indigestion. September 22, 2010.
  9. News: San Francisco Business Times. Ron Conway slams 'super angels' hard. Patrick Hoge. September 23, 2010.
  10. News: Showdown! Angels, Arrington to Go Mano a Mano. https://web.archive.org/web/20100928014544/http://www.reuters.com/article/idUS196786161120100925. dead. September 28, 2010. Wired Magazine. Ryan Singel. September 24, 2010.
  11. News: TechCrunch . AngelGate: Chris Sacca Responds To Ron Conway . Michael Arrington . September 26, 2010 . 5 June 2013.
  12. News: San Francisco Business Times . Patrick Hoge . FBI reportedly looking into Angelgate. September 23, 2010 .
  13. News: Fortune Magazine. Super-angels have dinner, all hell breaks loose. Dan Primack. September 22, 2010.
  14. News: Daily Finance. September 24, 2010. AngelGate or Not, Controlling the Market in Hot Startups Is Impossible. Alex Salkever.
  15. News: New York Magazine. How Michael Arrington's School of Friendship Journalism Led to 'AngelGate'. September 27, 2010. Nitasha Tiku.
  16. News: Wall Street Journal. 'AngelGate' Players Come Face To Face, But Fireworks Are Few. September 27, 2010. Tomio Geron.
  17. News: Los Angeles Times. 'AngelGate' disrupts TechCrunch conference but no 'Jerry Springer' moment. September 27, 2010. Jessica Guynn.

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