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So A Blogger Walks Into A Bar…

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Re: So A Blogger Walks Into A Bar…

#61

Post by dschobel »

tptacek wrote: post #13

In what sense do antitrust laws apply to investors? Why is it unlawful for investors to band together to get better terms for themselves? Wouldn't it be perfectly legal for these people to sit around a table an agree to merge and start a fund? If that's the case, how could it be unlawful for them to work on a joint venture? Just because I don't like the JV doesn't make it unlawful!

Why would VC firms meeting and agreeing to change terms for their clients in lock-step not be collusion whereas if the brick and mortar banks did, it would be? (and was: http://redtape.msnbc.com/2008/04/did-banks-collu.html)

Re: So A Blogger Walks Into A Bar…

#62

Post by [deleted] »

mixmax wrote: post #60

So a blogger gets a tip from a source, knows the people involved, acts on it and smells a rat. He sticks around and talks to a few people he knows, makes a few calls and gets a breaking story. Sounds to me like bloggers are the new journalists and that traditional media is in big big trouble.

[deleted]

Re: So A Blogger Walks Into A Bar…

#63

Post by j_baker »

tptacek wrote: post #42
nostromo wrote: post #33

Earlier quoted context omitted.

It sounds like price fixing, even though they are buying and not selling. Check out Wikipedia for a good write-up: "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. The group of market makers involved…

Would it still be price fixing if all of them got up from the table and announced the formation of Super Angel Capital Partners? I can't see how; there's tons of VC firms already. If that's not unlawful, how is a joint venture among them unlawful? Are we just stuck on the fact that they're "angel investors"? The law doesn't recognize any such sector of the venture capital business.

"Would it still be price fixing if all of them got up from the table and announced the formation of Super Angel Capital Partners?"

Yes. That would effectively make SACP a cartel. Price fixing is price fixing if it was done by a group of entities or one entity.

Re: So A Blogger Walks Into A Bar…

#64

Post by dschobel »

tptacek wrote: post #45
jnoller wrote: post #36

Earlier quoted context omitted.

They are a group of people supposedly conspiring to generate the worst possible terms for the people they are providing money to, while trying to force out or marginalize competition. IANAL though - even if not illegal, it's still pretty stinky, and a big part of me hopes it's not illegal. If it's not illegal, I hope they're outed and shamed if this is true. If it is illegal, it give the government reason to step in…

Or, this is a group of people collaborating to generate the best possible outcome for their own business. Every joint venture can be framed in anticompetitive terms. But in this case, what possible undue market influence can they have? The market will find other people to take these deals.

That's an unrealistically high standard and I can't think of any recent case which would meet it. Why didn't the market find a solution to Microsoft in the 90's or Intel in 2000's and, more importantly, why did the Feds feel the need to intervene?

Re: So A Blogger Walks Into A Bar…

#65

Post by enneff »

InclinedPlane wrote: post #51
tptacek wrote: post #42

Earlier quoted context omitted.

Would it still be price fixing if all of them got up from the table and announced the formation of Super Angel Capital Partners? I can't see how; there's tons of VC firms already. If that's not unlawful, how is a joint venture among them unlawful? Are we just stuck on the fact that they're "angel investors"? The law doesn't recognize any such sector of the venture capital business.

If they create a single super angel corporation then they could run afoul of anti-monopoly laws.

Hah, this made me laugh. As if they owe anybody anything! They're the ones taking the risks with their own money; if they want to be better informed through information sharing, more power to them.

Re: So A Blogger Walks Into A Bar…

#66

Post by jexe »

jiganti wrote: post #31

It's too early to write this blog post. Arrington tried to manufacture a happy medium between not saying anything and outing every person at the meeting. Not outing everyone implies you're not entirely sure. Not being entirely sure, yet talking about it anyway is a cheap way to get a story. Waiting until things are more clear cut would have earned him points in my book- I suppose it's not worth it when the alternativ…

I'm assuming he's trying to both get a good scoop AND stop the damage these angels can do to startups - the longer he waits, the more damage might be done.

I think he's struck a pretty good balance here by saying what needs to be said and no more, while still keeping it interesting.

Re: So A Blogger Walks Into A Bar…

#68

Post by 3pt14159 »

Lets file a class action lawsuit naming the top ten (virtually 100% eh?) super angels then call Michael as a witness. The case is simple: price fixing led to lower sized deals and higher valuations.

I almost never advocate lawsuits, but in this case it is totally justifiable. Just for the record, I'm actually not against collusion and price fixing as an idea (I believe that eventually market forces will correct it), but I'm against it if it is illegal because the market should be able to trust that laws are enforced.

Sue the bastards for billions worth of equity.

Re: So A Blogger Walks Into A Bar…

#69

Post by lsternlicht »

cool-RR wrote: post #30
jnoller wrote: post #9

I do hope he's wrong, or that this a mistake of some sort. The rise of Angel investors has seen a lot of ideas and entrepreneurs get needed money when they might not have under the traditional VC model. Something like this, if true, will cause the government to step in, and probably regulate and change things for the worse for a great many people. It won't just hurt these few super angels. It will take everyone with…

I wouldn't take anything he says seriously. [Edit: If it wasn't clear, I meant Arrington, not Jesse]

I think your statement was clear. However, I find it hard to believe Arrington would put some of his best sources at risk if his claims were completely unfounded.

Re: So A Blogger Walks Into A Bar…

#70

Post by chaosmachine »

asr wrote: post #50
chaosmachine wrote: post #28

There's a quote I can't quite remember. Goes something like: "When merchants meet to discuss business, the public is rarely the beneficiary".

Was it the Adam Smith quote "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public." Why do I know that off the top of my head? Civ IV... who says games can't be educational?

That's the one, thanks. Good old Civ :)
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