Entrepreneur at the Door; Angel at the Gate. Last night, as I do most Sunday nights, I was catching up with all the shows I like to watch on Hulu. I wont bore you with the list, but lets just say that at least one includes a talking rabbit, another a talking robot, and yet another a barely talking human. In between pseudo-Sorkin quips, I, as I often also do, was zooming through twitter. Most of the time, Sunday night twitter is full of football, random links to articles and really bad jokes (still not sure why Sunday is so devoid of humor). And in the midst of all of the noise was this tweet by John Meada: Now John, who I have never met, is the type of person that you tell people you once ate breakfast in the next room, and were too afraid to ask a very good friend for an introduction (Scott Belsky, it was not me when we ran into...
When Angels Fight, Silicon Valley Loses. The latest round of developments in the so-called "AngelGate," including alleged leaked emails and Twitter fails appears to indicate that the situation is more substantial than I thought. As a result, I'm forced to do something unusual--write a blog post without making any jokes. I've co-invested with Ron Conway; I've co-invested with Dave McClure. I've always felt that both of them have entrepreneurs' best interests at heart, and work hard on their behalf. If this "AngelGate" represents a rift between them, this is bad news for the entire ecosystem. I'll admit to enjoying what I thought was a fake publicity stunt; if it has turned suddenly real, I feel guilty of contributing to the sideshow. This is Silicon Valley, not Monday Night Raw. P.S. It's fun to generate faux controversies and rack up pageviews and comments, but not when it impacts people's reputations and relationships. I thought we ran Valleywag out of town for a reason.
» Founders Come First. Posted On Sep 22, 2010 | by Jon The last two weeks have seen incredible ink, time, and venom spread around the competitive dynamics in the super-angel and VC markets. First the “smackdown” news and chatter this week and now Angelgate. While this makes for great press and lots of page views, the voice of the Founder has been absent from virtually all of the discussion and postings. In fact, more than being absent, Founders lose from the shredding and group think and activity happening the market today, and this is a really bad thing. Super Angels and VCs are spending tons of time and energy arguing vehemently that one approach is better or best, all the while polarizing the discussion.
A lot of our industry has lost it way in the current environment and on this debate. Moreover, in the words of a friend, startups are a “team sport.” AngelGate Goes Nuclear, Startups Get the Fallout: Tech News « Just when you thought the AngelGate fuss — which Mike Arrington of TechCrunch touched off earlier this week with a blog post exposing a meeting of “super-angels” — couldn’t get any more emotionally fraught, legendary Silicon Valley investor Ron Conway upped the ante late Thursday with an email to some of the investors who were at the meeting, calling their discussions “despicable and embarrassing for the tech community.” Among other things, the long-time angel investor asked those at the meeting to remember who they are supposed to be working for, namely the founders of the startups they are investing in. This is a message we tried to get across in a recent post as well, and a point that several other prominent angels and investment funds such as True Ventures (see disclosure below) have also made in blog posts since the AngelGate affair first blew up.
True partner Jon Callaghan said it well in a post entitled simply “Founders Come First.” AngelGate: Who’s Thinking About the Startups?: Tech News « In a blog post that is already making waves in Silicon Valley and throughout the startup community, Mike Arrington says that he recently walked into a secret meeting of the Valley’s so-called “super-angels.” Those are the trendy, not-quite-VCs who invest smaller amounts of money in startups, and who like to make themselves out to be an entrepreneur’s best friend — the kind that knows what entrepreneurs are going through and share their pain by not charging huge fees, etc. Except, according to Arrington, things aren’t always what they seem. The point behind this meeting, the TechCrunch founder says, was to talk about how the super-angels (some of whom may appear on these lists) could consolidate their power within the Valley ecosystem and win more market share away from the traditional Sand Hill Road VC firms.
And are they planning to do this by offering better service to the entrepreneurs whose pain they claim to share? If these reports are true, that doesn’t sound very super at all. Ron Conway Drops A Nuclear Bomb On The Super Angels [Email] Dave mcclure - Interceder: real time news feed. Angelgate in a Nutshell. I was talking about Angelgate earlier today with an entepeneur (the new spelling) and we were talking about what a difference it makes that we don't know who was there when Mike Arrington walked in on the meetup of angels apparently colluding in an illegal fashion.
To see the difference, let's do some numbers. Suppose there are 150 active angel investors in Silicon Valley. Suppose there were 20 angels in the room on the day in question. That means 130 angels weren't there. Suppose you are one of the angels who wasn't. What do you do? Tough choice. Or you could call up all your contacts and say you weren't there. Now imagine that there are 1000 entrepreneurs in Silicon Valley out looking for money. So the net-effect of the story is to tarnish the reps of 150 angels, including 130 angels who did nothing wrong.
And to introduce doubt in the minds of the 1000 entrepreneurs. If you're one of the 130, you're probably begging Mike to publish the list right now. Heh. AngelGate: Ron Conway Rips 'Despicable and Embarrassing' Super-Angel Investors. Ron Conway, one of the most influential venture capitalists in technology, dropped a bombshell on Silicon Valley Thursday by accusing another group of prominent investors of "despicable and embarrassing" conduct surrounding hot startup investments.
Conway's attack throws a barrel of gasoline on the rapidly escalating conflagration known as AngelGate -- an alleged conspiracy by a cartel of top early-stage, or "angel," investors to collude and fix price levels for hot tech investments. Techcrunch, which first reported the alleged scheme, obtained a copy of Conway's extraordinary email attack and posted it late Thursday. Conway confirmed the authenticity of the email to DailyFinance Thursday night, but declined to comment further.
Earlier in the week, Techcrunch editor Michael Arrington, a former Silicon Valley lawyer, detailed what he described as a plot by angel investors "to keep other competitors out of the market, or to discuss ways to keep prices under control. " AngelGate: Who are the Super Angels that Michael Arrington is talking about in his 9/21/10 Techcrunch post, "So a Blogger Walks into a Bar..." Tech - How AngelGate Affects You...Yes, You. Fire in The Valley, Fire in My Belly... and Yes, Mike, I Have Stopped Beating My Wife. So i've been debating whether to write this post all day.
Unfortunately i probably have more balls than sense, but it drives me fucking insane to see some bullshit superangel conspiracy theory get whipped into a frenzy by people who weren't there, have no idea what the hell was discussed, and are ready to believe anything when someone yells FIRE! So here goes nothing... first a few clarifications: - mike arrington is a friend, an imposing figure, and a hard-nosed, hard-working journalist. that said, he's dead fucking wrong about there being some story around " collusion" (def'n). makes for great red meat on TechMeme & Twitter, but it's just so much horseshit. - startups & investors bitch & moan about price (aka valuation) all day long, but i don't really give a damn what other people think most of the time. buy or don't buy. negotiate or don't.
This is America, This is Capitalism, and it's a Free Fucking Country. me? In short: if it Bleeds, it Leads... and Fuck. As for lil ol' me? Finger-Pointing, Emails, Deleted Tweets, Rage. AngelGate Is Far From Over. So A Blogger Walks Into A Bar… Yesterday I was tipped off about a “secret meeting” between a group of “Super Angels” being held at Bin 38, a restaurant and bar in San Francisco.
“Do not come, you will not be welcome,” I was told. So I did what any self respecting blogger would do – I drove over to Bin 38, parked my car and walked in. in the back of the restaurant in a private room was a long oval table. Sitting around the table, Godfather style, were ten or so of the highest profile angel investors in Silicon Valley. These investors, known as “super angels” because they have mostly moved on to launch small venture funds of their own, are all friends of mine.
I knew each person in the room very, very well. I certainly didn’t think anything was amiss and I expected a friendly hello and an invitation to sit down for a drink or two before being shooed off while they talked about whatever they thought should be kept off record. Me: Hey! I’ve never seen a more guilty looking group of people. So what’s wrong with this? AngelGate dispute among Valley investors cracks wide open.
When TechCrunch editor Mike Arrington barged in on a secret meeting of super angels, the wealthy individuals who are taking an increasingly prominent role in startup investing, the facts were open to interpretation. Arrington alleged that he heard the meeting was about illegal collusion. That seemed so unlikely. But now an email sent by investor Ron Conway (right) shows that there is a real fracture in the angel group about whether there was an attempt at collusion, as Arrington alleged. Two days ago, Arrington wrote a post where he alleged that the secret meeting that he crashed was in fact an attempt by a group of super angels, or well-heeled investors with their own funds, to illegally collude by agreeing to hold down startup valuations.
At the time, it seemed pretty implausible that such a well-known group of smart people would try to get away with such a hare-brained scheme. Dave McClure, head of 500 Startups, wrote a post that blasted Arrington’s credibililty. TechCrunch editor walks into meeting of “super angels” engaged in alleged collusion. Mike Arrington, editor of TechCrunch, sure knows how to ruin a party.
He evidently walked in on a meeting of prominent Silicon Valley investors and discovered they were allegedly colluding to keep a lid on startup valuations, cartel style. In a blog post, Arrington said that he was tipped off about a secret meeting of “super angels,” or well-heeled investors who are competing with the best venture capitalists to find early stage investments in hot companies in Silicon Valley. Arrington was told he was not welcome at the meeting at Bin 38, a restaurant and bar in San Francisco. He went anyway and strolled into the private room in the back. Sitting at the table, “Godfather style,” were 10 or so of the “highest profile angel investors in Silicon Valley.” “I’ve never seen a more guilty-looking group of people,” Arrington wrote. Arrington said the topics included: We don’t know what’s true here. Super angel Dave McClure admits he was at secret dinner, denies collusion. Dave McClure, a “super angel” and founder of the seed stage startup fund 500 Startups, has writtten a profanity-ladened post in which he admits he was at a secret dinner that Techcrunch editor Mike Arrington barged in on.
But McClure denied Arrington’s allegations that there was any collusion among the angels to hold startup valuations down. “Unfortunately I probably have more balls than sense, but it drives me f****** [we cleaned up his language a little] insane to see some bull**** superangel conspiracy theory get whipped into a frenzy by people who weren’t there, have no idea what the hell was discussed, and are ready to believe anything when someone yells FIRE! ,” McClure wrote. McClure said he considered Arrington to be a friend, but he said Arrington was “dead f****** wrong” about the collusion which makes for “great red meat on Techmeme and Twitter, but it’s just so much horse****.”
“If you don’t like it, don’t buy it,” he said.