Well, at least one investor seems to have accidentally included himself in the mess (from TC's comments) http://twitter.com/speechu/status/25083299594
i've never heard of this guy before, and he isn't a coinvestor on any deal i've been on...
So A Blogger Walks Into A Bar…
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#212In 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!
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…
My buddy and I in college colluded to maintain market conditions on Lamborghini prices. As far as I can say, 300 million other Americans are participating in this. Our agreement was specifically regarding price (and lack of 0% financing).
I think in buyer's market it only makes sense when the supply of buyers is artificially limited. Not only it doesn't look like there's any shortage of capital, the conversation in question specifically discussed excluding new angel investors, furthering the point.
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#213@icey: can u change the title to something that explains the nature of the post? Something like "Super-Angels Colluding to Keep Valuations Down." I know u just kept the original headline, but it's confusing for people who haven't read the post. Just a request. 'Tis a VERY important thing for all to read in the community.
Just a request. Can you spell your words out if you're over the age of 13?
Oh come on! This is HN. Please don't make it like Digg. There is no need to flame people unnecessarily.
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#214Earlier quoted context omitted.
Here is something to consider. You have said yourself that as an angel you prefer to follow deals, rather than set the terms. A lot of angel investors are like that. The problem is that the guys who lead the rounds and set the terms are fixing the market. While there may be hundreds of angel investors out there, the reason why only 10 of them can rig the market in this way is because most of them, like yourself, are…
The trend lately is toward convertible notes issued by the startup itself. This means that nobody is leading and nobody is pricing the deal. There are plenty of other people (VCs, basically) that do lead, when there is a leader. It's just much rarer right now. And the stronger deals, not the weaker ones, tend to be lead; those are the deals where the entrepreneur has the most leverage, not the weakest. I don't get th…
I didn't mean to come across as outraged or to make accusations - it was a genuine observation.
When I raised a note I set the price, but it was through talking to the investors. That was a while ago though.
I think the core of what Arrington is saying is that they attempted to fix the market. ie. got fed up with how things are atm and tried to fix it in their own way. I know that some of these guys have been against notes for a while, but end up doing them anyway.
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#215I find it fascinating how the very qualities that lead people to call Michael Arrington an asshole are dramatically in evidence here. It takes a staggering immunity to social mores to walk in on a meeting of rich and powerful friends, friends who are connected to his own business in many ways (read: friends with leverage) and behave the way MA says he did, let alone go home and write that article. Very few people cou…
I have always felt MA had a certain...brashness, abrasiveness, assholish tone, whatever you want to call it... about him. You could feel it in his articles.
I now feel it is not only helpful but entirely necessary for him to develop that quality in his career path.
Kudos for pushing the boundaries Mr. Arrington. The evidence speaks for itself - you don't see this type of journalism in any industry anymore.
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#216Earlier 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?
The Quora list is very different from yours. And I think we should all be really careful about guessing, considering how much damage you could do to someone's reputation by guessing wrongly. There's at least one person on your list above who I'd be surprised to see part of this.
Vide the cognitive psychology experiments which show that once you mention a person's name, it gets connected in memory regardless of how doubtful the source ought to be, etcetera.
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#217Re: So A Blogger Walks Into A Bar…
#218Who cares?
TL;DR; Some investors meet up and discuss things.
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#219[deleted]
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#220I 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…
Arrington is smart, a lawyer himself, and already know he is headed straight to the witness stand. Thanks for blowing this whistle Mike. That's the TC we like.
I am not so sure - he said that several of the persons there were very uncomfortable with the deal, so being there alone would not be enough.
The rest is heresay, which is admissible in no non-kangaroo court that I know of.