Angelgate
Encyclopedia
Angelgate is a controversy surrounding allegations of price fixing
and collusion
among a group of ten angel investors in the San Francisco Bay Area
.
, editor of the TechCrunch
publication, wrote in his blog
that he had been turned away from a secret meeting among so-called "super angel
s" he knew, held at Bin38, a wine bar
in San Francisco's Marina District. 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. 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.
The blog became the subject of discussion among the Silicon Valley
start-up community over the next several days. 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". Dave McClure
, a well-known angel present at the event, wrote in a blog that Arrington's account was inaccurate, and a "tweet" (later deleted) complaining about Conway. Chris Sacca
, another attendee of the meeting, wrote a lengthy email that defended the participants and was critical of Conway, which was also leaked to TechCrunch.
began reviewing the incident.
There was skepticism that there was actually any collusion, or that price fixing could succeed if it was attempted. 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 (compiled on question-and-answer
site Quora
), and so-called "fakeplans" for super-angel meetups on the site plancast.com. On Monday, September 27, Ron Conway, Dave McClure, Chris Sacca, and others appeared at a panel discussion hosted by Arrington at his "TechCrunch Disrupt" conference in San Francisco where, despite Arringon's prodding, they avoided a "Jerry Springer
moment".
Price fixing
Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand...
and collusion
Collusion
Collusion is an agreement between two or more persons, sometimes illegal and therefore secretive, to limit open competition by deceiving, misleading, or defrauding others of their legal rights, or to obtain an objective forbidden by law typically by defrauding or gaining an unfair advantage...
among a group of ten angel investors in the San Francisco Bay Area
San Francisco Bay Area
The San Francisco Bay Area, commonly known as the Bay Area, is a populated region that surrounds the San Francisco and San Pablo estuaries in Northern California. The region encompasses metropolitan areas of San Francisco, Oakland, and San Jose, along with smaller urban and rural areas...
.
The issue
The scandal began in September 2010 after Michael ArringtonMichael Arrington
J. Michael Arrington is the founder and former co-editor of TechCrunch, a blog covering the Silicon Valley technology start-up communities and the wider technology field in USA and elsewhere...
, editor of the TechCrunch
TechCrunch
TechCrunch is a web publication that offers technology news and analysis, as well as profiling of startup companies, products, and websites. It was founded by Michael Arrington in 2005, and was first published on June 11, 2005....
publication, wrote in his blog
Blog
A blog is a type of website or part of a website supposed to be updated with new content from time to time. Blogs are usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video. Entries are commonly displayed in...
that he had been turned away from a secret meeting among so-called "super angel
Super angel
Super angel investor is a term sometimes used to describe a group of serial investors in early stage ventures who are perceived to be particularly sophisticated, insightful, or well-connected in the startup business community, particularly with respect to technology companies in Silicon Valley,...
s" he knew, held at Bin38, a wine bar
Wine bar
A wine bar is a tavern-like business focusing on selling wine, rather than liquor or beer. A typical feature of many wine bars is a wide selection of wines available by the glass. Some wine bars are profiled on wines of a certain type of origin, such as Italian wine or Champagne...
in San Francisco's Marina District. The participants at the meeting, among other things, discussed how they could compete with other angels, venture capitalists, and the Y Combinator
Y Combinator
Y Combinator is an American seed-stage startup funding firm, started in March 2005. Y Combinator provides seed money, advice, and connections at two 3-month programs per year...
business incubator for the limited pool of worthy investment opportunities. 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
Startup company
A startup company or startup is a company with a limited operating history. These companies, generally newly created, are in a phase of development and research for markets...
companies, and how to keep better-funded venture capitalists from investing.
The blog became the subject of discussion among the Silicon Valley
Silicon Valley
Silicon Valley is a term which refers to the southern part of the San Francisco Bay Area in Northern California in the United States. The region is home to many of the world's largest technology corporations...
start-up community over the next several days. Investor Ron Conway
Ron Conway
Ron Conway is an American angel investor, often described as one of the "super angels". Conway is recognized as a strong networker and is based in Silicon Valley.-Early career:...
, whose business partner attended the meeting, wrote an email highly critical of the angels involved and called the event "despicable and embarrassing". Dave McClure
Dave McClure
Dave McClure is an entrepreneur and prominent angel investor based in the San Francisco Bay Area, who founded and runs the business incubator "500 Startups". He is often described as one of the super angel investors.-Bio:...
, a well-known angel present at the event, wrote in a blog that Arrington's account was inaccurate, and a "tweet" (later deleted) complaining about Conway. Chris Sacca
Chris Sacca
Christopher Sacca is a venture investor, public speaker, private equity adviser, and former employee of Google Inc. He is an investor in Twitter.-Education:...
, another attendee of the meeting, wrote a lengthy email that defended the participants and was critical of Conway, which was also leaked to TechCrunch.
Aftermath and critique
Reports arose that the United States Federal Bureau of InvestigationFederal Bureau of Investigation
The Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...
began reviewing the incident.
There was skepticism that there was actually any collusion, or that price fixing could succeed if it was attempted. The event also gave rise to various online cultural phenomena. Among other things there was a flash mob
Flash mob
A flash mob is a group of people who assemble suddenly in a public place, perform an unusual and sometimes seemingly pointless act for a brief time, then disperse, often for the purposes of entertainment, satire, artistic expression...
at the wine bar, a Hitler Downfall parody, a spike in the establishment's google rank, a number of twitter jokes (compiled on question-and-answer
Knowledge market
A knowledge market is a mechanism for distributing knowledge resources. There are two views on knowledge and how knowledge markets can function. One view uses a legal construct of intellectual property to make knowledge a typical scarce resource, so the traditional commodity market mechanism can be...
site Quora
Quora
Quora is a question-and-answer website created, edited and organized by its community of users. The site was founded in June 2009, launched in private beta in December 2009, and made available to the public on June 21, 2010....
), and so-called "fakeplans" for super-angel meetups on the site plancast.com. On Monday, September 27, Ron Conway, Dave McClure, Chris Sacca, and others appeared at a panel discussion hosted by Arrington at his "TechCrunch Disrupt" conference in San Francisco where, despite Arringon's prodding, they avoided a "Jerry Springer
Jerry Springer
Gerald Norman "Jerry" Springer is a British-born American television presenter, best known as host of the tabloid talk show The Jerry Springer Show since its debut in 1991...
moment".
External links
- "A blogger walks into a bar" - Arrington's blog entry
- Subject: Super Angels Gathering - Ron Conway's letter (reproduced in TechCrunch)
- What are the best Bin 38 meeting jokes? - Quora compilation of meeting jokes