‘AngelGate’ disrupts TechCrunch conference but no ‘Jerry Springer’ moment
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TechCrunch founder Michael Arrington kicked off the aptly named TechCrunch Disrupt conference in San Francisco on Monday with a bit of controversy. A furious volley of blog posts last week questioned if Silicon Valley’s top angel investors were colluding to keep a lid on the rising cost of investing in technology start-ups and shut out competitors.
Arrington fired off the initial bombshell blog post after he tried to crash a private meeting of prominent angel investors at a San Francisco restaurant called Bin 38.
Arrington said the room of investors accounted for ‘nearly 100% of early stage start-up deals in Silicon Valley.’ He left after his arrival was met with stony silence.
The next day Arrington spoke with a few of the participants to find out what was discussed. He concluded that the investors were working together to drive down valuations of start-up companies. The allegation set fire to online forums as people tried to guess who was at the meeting and what was really discussed.
In the meantime, investors publicly defended their participation. In a colorful blog post, PayPal veteran and angel investor Dave McClure dismissed talk of collusion and said the investors discussed innovation, acquisitions, valuations and term sheets, how to make it easier for entrepreneurs to get access to capital and the direction of the industry.
The fireworks got even louder with the godfather of angels, Ron Conway, weighing in about his reservations (and then again) and with Chris Sacca of Lowercase Capital responding with deep reverence but also deep disagreement.
‘Angelgate’ saturated social media -- Twitter, Quora, Facebook (and spawned jokes and a Hitler video) as heated e-mails were leaked to Arrington.
Wealthy individuals who make early investments in young start-ups are increasingly vital to Silicon Valley’s ecosystem. These days they are such major players in so many hot deals that they are competing with the top venture capital firms.
Showing off his in-your-face brand of humor, McClure showed up to the angel investing panel sporting a T-shirt: ‘I was at Bin 38 and all I got was this lousy valuation.’
On the panel with him were Conway and Sacca.
Despite the palpable tension onstage, Sacca dismissed the episode as a ‘misunderstanding’ that was ‘worth getting past.’
After trying to probe further, Arrington said: ‘We are not going to have a Jerry Springer moment here?’
Maybe next time.
-- Jessica Guynn