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So A Blogger Walks Into A Bar…

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Re: So A Blogger Walks Into A Bar…

#171

Post by mhendrick »

jeromec wrote: post #165
mhendrick wrote: post #164

Earlier quoted context omitted.

Correct me if I'm wrong, but isn't it likely that the angels involved also make up a strong percentage of the people who invest on Demo Day in post-YC companies? How can it be a "PG vs Angels" situation when the parties involved are likely some of YC's portfolio companies biggest "supporters"?

Correct me if I'm wrong, but isn't it likely that the angels involved also make up a strong percentage of the people who invest on Demo Day in post-YC companies? Yes, I believe so. How can it be a "PG vs Angels" situation when the parties involved are likely some of YC's portfolio companies biggest "supporters"? That question might be better put to those Angels in the bar...

I'm not defending the angels involved by any means; I actually think it's a great thing that this has been exposed if it is indeed what's been going on. The easy access to YC companies may in fact be what emboldened them to act in this manner in the first place. Once this all plays out, I think it's safe to assume that at least a few of the angels in question are going to have to answer for their actions. Should be interesting to hear what they have to say.

Re: So A Blogger Walks Into A Bar…

#172

Post by Keyframe »

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!

Think of it as a groupon for investors.

Re: So A Blogger Walks Into A Bar…

#173

Post by dandelany »

brendonjason wrote: post #169
EvanMiller wrote: post #162

Earlier quoted context omitted.

"3. Parallel action by competitors is in itself normally quite harmless and does not subject them to liabilities." Not sure what your sources are, but courts have ruled that parallel action can be sufficient evidence of conspiracy under Section 2 of the Sherman Act. See e.g. American Tobacco v. United States (1946), available here: http://supreme.vlex.com/vid/american-tobacco-v-united-states... The Supreme Court wrot…

I find this somewhat dubious; I wasn't there, but if I was one of those guys, I'm not sure I'd continue the "evil meeting" after Michael stumbled in uninvited. If he came after the meeting ended, why weren't they all "just about to leave." Having said that, I'm sorry if my confusion gives a way my ignorance of the subject, but are these angels selling anything to a marketplace? I thought angels invested their money.…

Interesting questions... IANAL, but I imagine they're colluding to bring down the valuations of startups, therefore essentially fixing the "price" of their money, to be paid for in startup equity.

If I, and others, say your company is worth a million dollars, then I'm fixing the price of my $500,000 at 50% of your company.

Re: So A Blogger Walks Into A Bar…

#174

Post by mhendrick »

MediaSquirrel wrote: post #167
mhendrick wrote: post #164

Earlier quoted context omitted.

Correct me if I'm wrong, but isn't it likely that the angels involved also make up a strong percentage of the people who invest on Demo Day in post-YC companies? How can it be a "PG vs Angels" situation when the parties involved are likely some of YC's portfolio companies biggest "supporters"?

YC is the seller, angels at Demo Day are the buyers. Just cuz you work with someone closely doesn't mean you won't or can't try to screw them.

Agreed. It's possible they got a bit overconfident in their respective positions because of the easy access to so many well-vetted companies.

Re: So A Blogger Walks Into A Bar…

#175

Post by jwerlin »

View from one entrepreneur's seat:

1. Super Angels networking is expected, allegedly sharing deal terms (convertible notes, etc.) and allegedly working together to try and lower valuations is definitely not representative of a healthy 'free' market.

2. Singling out a successful model and trying to replicate it and improve upon it isn't horrible, but allegedly singling out one entity (YC) trying to limit something inherently doing good by entrepreneurs is horrible.

3. Good or bad / legal or illegal, if this episode results in any increase of government regulation/oversight in any way for funding at this level then both sides lose.

4. This entire episode, for me, reinforces the need for start ups to go bootstrap, achieve revenue and profitability and then, if funding is proved to be needed down the road, go in with a stronger hand when you sit across the table from any funding source.

Re: So A Blogger Walks Into A Bar…

#176

Post by guelo »

guelo wrote: post #111
joshbuckley wrote: post #8

Earlier quoted context omitted.

He said "it included just about every major angel investor in Silicon Valley" - which people can make easy assumptions about who it is.

I'm guessing the top 10 super angels would include Marc Andreessen, Chris Dixon, Ron Conway and the PayPal guys Peter Thiel, Reid Hoffman, Max Levchin, Keith Rabois Who else?

This question at Quora

http://www.quora.com/Who-are-the-Super-Angels-that-Michael-A...

Re: So A Blogger Walks Into A Bar…

#177

Post by aufreak3 »

brendonjason wrote: post #169
EvanMiller wrote: post #162

Earlier quoted context omitted.

"3. Parallel action by competitors is in itself normally quite harmless and does not subject them to liabilities." Not sure what your sources are, but courts have ruled that parallel action can be sufficient evidence of conspiracy under Section 2 of the Sherman Act. See e.g. American Tobacco v. United States (1946), available here: http://supreme.vlex.com/vid/american-tobacco-v-united-states... The Supreme Court wrot…

I find this somewhat dubious; I wasn't there, but if I was one of those guys, I'm not sure I'd continue the "evil meeting" after Michael stumbled in uninvited. If he came after the meeting ended, why weren't they all "just about to leave." Having said that, I'm sorry if my confusion gives a way my ignorance of the subject, but are these angels selling anything to a marketplace? I thought angels invested their money.…

I'm ignorant enough to have the same question in my mind.

Re: So A Blogger Walks Into A Bar…

#178

Post by jeromec »

brendonjason wrote: post #169
EvanMiller wrote: post #162

Earlier quoted context omitted.

"3. Parallel action by competitors is in itself normally quite harmless and does not subject them to liabilities." Not sure what your sources are, but courts have ruled that parallel action can be sufficient evidence of conspiracy under Section 2 of the Sherman Act. See e.g. American Tobacco v. United States (1946), available here: http://supreme.vlex.com/vid/american-tobacco-v-united-states... The Supreme Court wrot…

I find this somewhat dubious; I wasn't there, but if I was one of those guys, I'm not sure I'd continue the "evil meeting" after Michael stumbled in uninvited. If he came after the meeting ended, why weren't they all "just about to leave." Having said that, I'm sorry if my confusion gives a way my ignorance of the subject, but are these angels selling anything to a marketplace? I thought angels invested their money.…

Think of the stock market. That's certainly a marketplace. It's made up of investors seeking to earn a return on their money by investing in companies. Think of the illegalities involved in collusion to manipulate the stock market. Now think of Silicon Valley as a less formal/regulated stock market...

With Groupon nobody is asked to not buy or otherwise participate in the market unless done through Groupon. Instead, it's like a grocery store co-op; members pool their money to get more buying power. This doesn't mean they agree to refrain from shopping elsewhere, as that would be collusion/conspiring to produce a market effect. IANAL

Re: So A Blogger Walks Into A Bar…

#179

Post by brendonjason »

dandelany wrote: post #173
brendonjason wrote: post #169

Earlier quoted context omitted.

I find this somewhat dubious; I wasn't there, but if I was one of those guys, I'm not sure I'd continue the "evil meeting" after Michael stumbled in uninvited. If he came after the meeting ended, why weren't they all "just about to leave." Having said that, I'm sorry if my confusion gives a way my ignorance of the subject, but are these angels selling anything to a marketplace? I thought angels invested their money.…

Interesting questions... IANAL, but I imagine they're colluding to bring down the valuations of startups, therefore essentially fixing the "price" of their money, to be paid for in startup equity. If I, and others, say your company is worth a million dollars, then I'm fixing the price of my $500,000 at 50% of your company.

IANAL(E), but this scenario would seem to be more of a concern if startups in Silicon valley got together over dinner to deny deals that didn't offer similar terms and prices in dollars for securities of all startups represented at said dinner simultaneously.

As for angels fixing the "price of their money" I don't understand how antitrust applies to this anymore than it would to, say, how LIBOR is determined.

If antitrust applies to colluding on the dollar amount to be paid OUT instead of price asked for money coming in, then if I start a boycott of something (colluding to pay $0) am I guilty of violating antitrust laws?

As I understand it (not much, I admit), antitrust applies to goods and services, not cost of money. If antitrust applied to cost of money, the Federal Reserve would not exist since it's basically an extension of the member banks that make up its institutional board of directors (not board of governers). All they do is get together and fix the price of money to be printed and lent out to member banks.

Also, this whole "I stumbled in on a secret meeting of powerful men conspiring to start a revolution" thing is somewhat suspect; throughout history this gambit, if it actually happened that way, is usually either desperate grab at 15 minutes of fame (which seems unlikely given Michael's popularity), an attempt to gain instant credibility on some esoteric but useful new subject ("I was the only outsider privvy to what happened there, so you can trust me") or, unfortunately, a cynical move feigned by the men in the room to inspire hasty and possibly faulty reactionary stances by the supposed target of their "envy".

I could be wrong though. I just can't believe guys who are careful enough to get to such a position in life would all simultaneously get so careless. On the same day. In the same place.

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