Angelgate

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]

gollark: ```thread 'main' panicked at 'Could not spawn the process.: Os { code: 1, kind: PermissionDenied, message: "Operation not permitted" }', libcore/result.rs:945:5note: Run with `RUST_BACKTRACE=1` for a backtrace.```
gollark: Rust direct calls: a few microseconds per iteration. tput calls: I can't complete the benchmark because it breaks my terminals constantly.
gollark: It broke my terminal emulator. I shall use a faster one.
gollark: Benchmarking `tput setaf 2` vs Rust's `term` library...
gollark: <@116952546664382473>

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