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So A Blogger Walks Into A Bar…

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Re: So A Blogger Walks Into A Bar…

#181

Post by mattmaroon »

vaksel wrote: post #127
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.

a breaking story would name names...him not naming names just means he can use this as a hammer to get better terms for Techcrunch(either I get exclusive to every deal you guys do...or your names will be posted)

Him not naming names means that people will continue to give him information in the future. He'd be shooting himself in the foot by naming a source that requested anonymity.

Re: So A Blogger Walks Into A Bar…

#182

Post by _delirium »

EvanMiller wrote: post #162
grellas wrote: post #130

I am late in joining this thread and will add only a few observations to supplement the many good comments already here: 1. Competitor collusion and express agreements to restrict the freedom of each to compete (i.e., horizontal contractual dealings) do indeed expose the colluding parties to potentially serious liabilities under the Sherman and FTC Acts. If that is what is going on here, then Mr. Arrington has fired…

"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…

My impression is that the Supreme Court's significantly pared that back in further cases. Copperweld Corp. v. Independence Tube (1984) held that parallel action was inconclusive evidence of antitrust violations, though it could serve as circumstantial evidence. In Bell Atlantic v. Twombly (2007), the Court quoted that approvingly, and held that an allegation of parallel action, without a further plausible allegation of a conspiracy to engage in the parallel action consciously, wasn't even enough to state an antitrust claim sufficient to survive immediate dismissal, let alone prevail.

I'm hardly a legal expert, but I do recall some law-prof bloggers around 2007 claiming that it was confirmation that the parallel-action-suggests-conspiracy rule was dead and buried, even if not explicitly overturned.

Re: So A Blogger Walks Into A Bar…

#183

Post by brendonjason »

jeromec wrote: post #178
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.…

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,…

If I have an investing club and we come to define an investment approach, say, what stocks we like and what we think they should be valued at, are we colluding to price fix the market? If I think a company is over priced and I am in charge of executing trades for my investing club, whose members unanimously agreed not to buy the stock in question until it fell down say, $20 more in price - are we colluding? Yes. Colluding to price fix? No. We're simply colluding not to participate in the buy side. That may or may not lead to sellers slowly changing their asking price. But that's a two-way street. I don't see the illegality according to anti-trust. Now if every major instututional house/hedge/mutual/pension fund that owned that stock got together and colluded to refuse to SELL us any stock until we agreed to their higher price, that I understand is illegal. They are fixing the price literally. But I don't see how us refusing to participate in a transaction on the buy side is illegal whether we have 5 members or 5 million.

Saying that the angels are colluding to price fix buys into Michael's assertion that "together, the men in that room account for nearly 100% of all angel deals". That means that their "deals" are the commodity in question, and they are free to do as they wish. If it's their money, then it's hard to make the claim that their money is the market. There's certainly more money in the world than theirs.

Re: So A Blogger Walks Into A Bar…

#184

Post by BrandonM »

matt1 wrote: post #39

But the conversation has evolved to the point where these super angels are actually colluding (and I don’t use that word lightly) to solve a number of problems, say multiple sources who are part of the group and were at the dinner. Given Arrington's allegations, why would someone in the group or at the dinner admit to the collusion? These are smart guys talking to a prolific, ballsy blogger--what do they expect will…

> why would someone in the group or at the dinner admit to the collusion?

He mentioned that they were uneasy with the direction the talks had taken. I could definitely understand a couple of them seeing this admission as a good way to get out of a compromising situation while not leaving themselves at the disadvantage of being an outsider.

Re: So A Blogger Walks Into A Bar…

#186

Post by bl4k »

joshu wrote: post #170
qq66 wrote: post #136

Earlier quoted context omitted.

I don't think that Joshua Schacter is a "super angel" as the TC post uses the term.

I'm not even a medium angel.

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 followers.

How about the 90% of the other angels step out and actually lead some deals and price them, so that we have a real investment market at the seed stage.

Re: So A Blogger Walks Into A Bar…

#187

Post by guelo »

grellas wrote: post #130

I am late in joining this thread and will add only a few observations to supplement the many good comments already here: 1. Competitor collusion and express agreements to restrict the freedom of each to compete (i.e., horizontal contractual dealings) do indeed expose the colluding parties to potentially serious liabilities under the Sherman and FTC Acts. If that is what is going on here, then Mr. Arrington has fired…

Does it matter if the participants have monopoly power over the market? I have a hard time believing Arrington's claim that "ten or so" angels control "nearly 100% of early stage startup deals in Silicon Valley". If they control lets say only 50% of this market would it still be illegal collusion?

Re: So A Blogger Walks Into A Bar…

#188

Post by [deleted] »

swombat wrote: post #99
mattmaroon wrote: post #93

Earlier quoted context omitted.

This goes well beyond sensationalism. I'm inclined to believe him for three reasons: 1. Mike's not known for boldly lying. He might publish rumors that Facebook is building a phone too liberally, but I've not heard of him saying "I saw x happen" and it wasn't true. Assuming the account of what he himself saw was accurate it's hard to imagine collusion wouldn't be the purpose. 2. This sounds like something that would…

Add to that that there is no convincing reasons why this group of angels would manufacture this story to lead him on. Unlike with some other TC stories which turned out to be manufactured to discredit TC, in this one, the sources themselves would risk a lot by leaking this - true or false.

[deleted]

Re: So A Blogger Walks Into A Bar…

#189

Post by brc »

mhendrick wrote: post #164
jeromec wrote: post #144

Earlier quoted context omitted.

I don't think anybody's stated interests should be taken as an indicator of their true interests. I agree. (actually I'd replace "taken as an indicator" with "taken as an absolute indicator") In this case, with PG, I do believe that his stated intentions are sincere. I agree.

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"?

One of the outputs from the YC process is better educated founders who have a lot more guidance in negotiating through a deal.

Even if the deal flow was exactly the same, just having the founders suffering less from information assymetry would be a stone in the shoe of the Angels.

Think of it this way : if YC did all the same things, but also turned founders into being Angel patsies at dealtime, do you think they would be upset about it? I would guess it's the information about how to negotiate, and what a good deal looks like is the problem. I'm sure they love the concept of demo-day to go deal shopping, but would prefer it if the products didn't talk back.

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