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AngelGate: Chris Sacca Responds To Ron Conway

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Re: AngelGate: Chris Sacca Responds To Ron Conway

#61

Post by protomyth »

adrianwaj wrote: post #16
ramanujan wrote: post #11

Mark my words: all of Silicon Valley will regret it if the federal government gets involved in angel financing, "collusion" or no colllusion. It is not easy to build a Silicon Valley, but choking off deal flow with red tape could well destroy it. When the government enters an area on the basis of negative press coverage, it does not have an informed opinion or a light touch. Think about it: years later, we are still…

For me, minimum capital requirements to be an accredited investor is already far worse than the disease. I'd prefer to see certification programs that people raising money must apply-for, and have that be the basis of whether an investment is valid for the market, rather than placing a capital requirement on potential investors as the way to determine if an investor is smart enough to reject scams, and thus save the…

Certifications are generally used to keep people out of a market and allow entrenched players to control things. Look at the state of Louisiana's Florist License for and example of the absurd and protectionist.

Re: AngelGate: Chris Sacca Responds To Ron Conway

#62

Post by gojomo »

newman314 wrote: post #41
lzw wrote: post #29

Earlier quoted context omitted.

I cannot meet those "accredited investor" requirements, which if you think about it, are really meant to cut off dealflow for anyone who isn't already rich. Meanwhile, I have easily lost an angel investment's sized amount of money in equities and derivatives I've controlled. (and made many times that in positive returns... but it is the losses the government pretends like they are protecting me from.) I could have be…

Not trying to throw Chris under the bus here but if his stated net worth is <$1million when he started, was he not in violation of the definition of "accredited investor" per Wikipedia?

Not if his income was over $200K in the prior 2 years, and expected to be the same in the current year. The income level is an alternate, not additional, qualification.

And, perhaps he fudged some numbers, by inflating the value of something illiquid, to claim to be accredited slightly before he was.

As I understand it -- but could be wrong, IANAL -- this requirement isn't a matter of providing formal documentation to the government beforehand, but of asserting your status to the security issuer, perhaps with some documentation, and them accepting your assertion.

Only if things go south, and disputes/lawsuits begin, would the fact that money was accepted from non-accredited investors begin to cause liability and enforcement troubles for the issuers. So the issuers are motivated to ask for some documentation, but could also easily 'look the other way' or accept flimsy assertions in some instances.

Re: AngelGate: Chris Sacca Responds To Ron Conway

#64

Post by gjm11 »

steveklabnik wrote: post #60
gjm11 wrote: post #58

Earlier quoted context omitted.

If I'm understanding your use of the word "anti-competitive" correctly, then any government, simply by virtue of being a government, is "anti-competitive". So what would constitute "healing"? Total anarchy? Welcome to Somalia.

There was a really good comment the other day regarding Somalia, but searchyc isn't finding it. Basically, there's actually some studies that suggest Somalia is doing _better_ under 'anarchy' than not. It's only after the UN stopped trying to impose a state that things started getting better.

I don't know about HN comments, but there indeed seem to be some studies suggesting that.

http://rru.worldbank.org/Documents/PapersLinks/280-nenova-ha... suggests that the private-sector economy in Somalia did OK during its period of anarchy. (Arguably it's still in anarchy, but less so than before 2006.)

http://www.independent.org/pdf/working_papers/64_somalia.pdf claims that Somalia's economic performance and standard of living "improved during its period of statelessness". Cautionary note: this paper was put out by a libertarian think tank; I don't know enough about their level of integrity to know whether that's worrying.

http://www.peterleeson.com/Better_Off_Stateless.pdf says that the government of Somalia before its period of near-total anarchy was so awful that anarchy was better.

The main takeaway from all this is probably that a sufficiently bad government can be even worse than anarchy. But it also suggests that Somalia was in such a terrible state before its government collapsed completely that any troubles after that have a plausible explanation other than the evils of anarchy.

So, "Welcome to Somalia" was arguably unfair. On the other hand, there don't seem to be a lot of better examples of anarchies available for inspection...

Re: AngelGate: Chris Sacca Responds To Ron Conway

#65

Post by ghshephard »

irahul wrote: post #54
ghshephard wrote: post #42

Earlier quoted context omitted.

"Second, the work angels are doing aren't for the founders - it's towards ROI." Some Angels are focused on that. Others have a different take, from Ron Conway's Email: "I want to clarify once and for all my total disagreement with your values and motives for being investors. I have stated consistently for year that I invest because I love helping entrepenuers and watching them learn and succeed." And, as someone who'…

Then we must agree to disagree. For analogies sake, let's talk about Google. Google hires the best geeks, provides free food, doesn't hire PHBs, have a large impact on the world in some ways etc etc. Its hiring best geeks works as a magnet pulling other geeks. Not hiring PHBs means programmers are comfortable working here. Work being done at Google having a large impact gives people a sense of accomplishment and vali…

I don't recall anyone ever claiming Google was ever "doing it for the programmers" - it's well understood that the perks and environment are there to attract talent and increase their profitability. Also, free gourmet food is increasingly a (relatively inexpensive) standard perk in the valley, so it no longer really sets Google apart as much as it used to.

And note, I never said Ron Conway wasn't there for the money, I just that it wasn't the objective. The objective is to help great entrepreneurs succeed. The money is a (not unexpected) side-effect of succeeding at that objective.

At this stage in the game, and with his network, I'm sure Ron Conway could take much higher ROI approaches if that were really his primary goal. He just isn't wired that way.

Re: AngelGate: Chris Sacca Responds To Ron Conway

#66

Post by kennedywm »

pointillistic wrote: post #12

Someone, a person who was at the meeting informed Arrington about the negative purpose of the conversations. So either that person was lying to Arrington and Arrignton to the readers or Sacca is telling half truths. Even as he wasn't at the second meeting anyway. It's rather obvious that for Sacca his relationship with Conway is more valuable than anything he does for the startups or his freaking charities. The purpo…

Freaking charities? I know we're entrepreneurs here, but I think helping others is about the best thing a person can do.

Re: AngelGate: Chris Sacca Responds To Ron Conway

#67

Post by steveklabnik »

gjm11 wrote: post #64
steveklabnik wrote: post #60

Earlier quoted context omitted.

There was a really good comment the other day regarding Somalia, but searchyc isn't finding it. Basically, there's actually some studies that suggest Somalia is doing _better_ under 'anarchy' than not. It's only after the UN stopped trying to impose a state that things started getting better.

I don't know about HN comments, but there indeed seem to be some studies suggesting that. http://rru.worldbank.org/Documents/PapersLinks/280-nenova-ha... suggests that the private-sector economy in Somalia did OK during its period of anarchy. (Arguably it's still in anarchy, but less so than before 2006.) http://www.independent.org/pdf/working_papers/64_somalia.pdf claims that Somalia's economic performance and stand…

Yeah, really all we have is current Somalia, and the Spanish Civil War... there are others, just not as well known: http://en.wikipedia.org/wiki/List_of_anarchist_communities

Re: AngelGate: Chris Sacca Responds To Ron Conway

#68

Post by TheCondor »

dschobel wrote: post #24
ramanujan wrote: post #11

Mark my words: all of Silicon Valley will regret it if the federal government gets involved in angel financing, "collusion" or no colllusion. It is not easy to build a Silicon Valley, but choking off deal flow with red tape could well destroy it. When the government enters an area on the basis of negative press coverage, it does not have an informed opinion or a light touch. Think about it: years later, we are still…

Is the story getting any coverage outside the SV echo chamber? I'd be quite surprised if we see the issue cross over into the mainstream.

I was going to ask this with it be limited to not just the SV echo chamber but the Techcrunch one as well.

What stood out to me the most, maybe because I'm not in SV, but the claim that ~10 "angels" were involved with 99% of the startups in SV. That just doesn't seem possible in a really healthy startup environment. I mean, there are startups that self boot-strap, there are startups that have a single owner that can fund them, there are startups that have a reputation and pedigree and go straight to institutional funding. There are also companies that stay below radar. How many software companies are we talking about in the greater SV Bay Area? 1200? 1500? And these 10 guys are in nearly all of them? Surely these are only the startups that fill in their crunchbase details or something, right?

Does nobody go outside the valley for funding?

Re: AngelGate: Chris Sacca Responds To Ron Conway

#69

Post by stretchwithme »

lzw wrote: post #49
stretchwithme wrote: post #34

Earlier quoted context omitted.

I love how government, the most anti-competitive entity there is, will be investigating anti-competitive behavior. Physician, heal thyself.

I hate how you were down voted for pointing out a simple truth. Every industry government gets involved in, it passes laws making competition illegal. We had a thriving and quickly growing mail industry in this country before government took it over (for the purpose of censorship at the time) and made delivering first class mail illegal. They actually do sting operations and fine companies caught forwarding "non time…

I like the Swiss system. People can actually move their neighborhood to a different canton or create a new one if the one they don't like how things are run in the canton they are in. And it rarely happens, simply because it can.

And the people must approve many measures and certainly those changing the constitution of the country. They have referendums all the time and also proportional representation, which aligns the legislature with the voters.

Of course, this means Switzerland minds it own business and won't invade other countries, but I guess that's the downside of government not driven by anti-competitive urges.

The downvotes are ok. There seems to be an element here that doesn't like it when you state the obvious, but most are rational though.

Re: AngelGate: Chris Sacca Responds To Ron Conway

#70

Post by ajju »

steveklabnik wrote: post #60
gjm11 wrote: post #58

Earlier quoted context omitted.

If I'm understanding your use of the word "anti-competitive" correctly, then any government, simply by virtue of being a government, is "anti-competitive". So what would constitute "healing"? Total anarchy? Welcome to Somalia.

There was a really good comment the other day regarding Somalia, but searchyc isn't finding it. Basically, there's actually some studies that suggest Somalia is doing _better_ under 'anarchy' than not. It's only after the UN stopped trying to impose a state that things started getting better.

I think the real test of whether anarchy is preferable to stable government ('anti-competitive' or not), is whether Somalia is doing better than the United States. A perfectly fair comparison would require Somalia to be under anarchy for the same number of years as the U.S. has been a democracy, but presumably you could pick younger democracies for an easier comparison.

I think you will find that:

1) Anarchies, almost by definition, spill into neighboring countries in the form of violence and/or refugess. This is the reason the U.N. intervenes in the first place.

2) A system of governance imposed by outsiders may be worse than anarchy, but self-governance, given a decade or more, will result in conditions better than anarchy. Indeed, I believe that left alone, an anarchy over time will develop into some form of stable government. Usually it's a dictatorship but there is a small chance it may be some form of self governance.

These are both as yet unproven claims based on my intuition of course. If someone has data to back these up or refute them, that would be really interesting.

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