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So A Blogger Walks Into A Bar…

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201–210 of 258 posts

Re: So A Blogger Walks Into A Bar…

#201

Post by marcamillion »

This is so disappointing. Firstly, I am glad Mike called them out. Took a lot of cajones to do it, and say what you will about TC and Mike...stumbling across something like this and not shutting up takes major balls.

Secondly, here I was rooting for these 'Super Angels' to finally revolutionize the VC industry and send the 'old guard' packing by better understanding the founders (not just talking a good game). Turns out that they are all the same.

I would not be surprised if this further turns founders off of taking angel money altogether and deciding to just get to profitability as quickly as possible - further shifting the funding tide in the founders direction...which weeds out a good amount of these 'Super Angels'.

Either way, I suspect there is a shake-out coming.

Thanks Mike.

Re: So A Blogger Walks Into A Bar…

#202

Post by SkyMarshal »

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…

Grellas, what's your take on this Quora comment? In a nutshell, it's not illegal for collusion on the buy side, only the sell side:

Tarun Nimmagadda, Mutual Mobile Co-Founder, COO

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

"The article was a fun read, but it is a false claim that this is illegal. Collusion, price fixing, and dividing markets is only illegal on the selling side. Think about how people and groups are able to band together for purchasing power and special treatment when buying goods/services. Its not illegal.

Worth noting thought that if this price manipulation happened in relation to a company with over a 100 investors, SEC regulations would begin to apply and this behavior would be illegal"

Re: So A Blogger Walks Into A Bar…

#204

Post by Alex3917 »

SkyMarshal wrote: post #202
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…

Grellas, what's your take on this Quora comment? In a nutshell, it's not illegal for collusion on the buy side, only the sell side: Tarun Nimmagadda, Mutual Mobile Co-Founder, COO http://www.quora.com/Who-are-the-Super-Angels-that-Michael-A... "The article was a fun read, but it is a false claim that this is illegal. Collusion, price fixing, and dividing markets is only illegal on the selling side. Think about how pe…

"Collusion, price fixing, and dividing markets is only illegal on the selling side."

IANAL, but didn't Standard Oil got broken up largely for being a monopsony? In fact the first two complaints from the DoJ were about sell-side issues:

"Rebates, preferences, and other discriminatory practices in favor of the combination by railroad companies; restraint and monopolization by control of pipe lines, and unfair practices against competing pipe lines; contracts with competitors in restraint of trade; unfair methods of competition, such as local price cutting at the points where necessary to suppress competition; [and] espionage of the business of competitors, the operation of bogus independent companies, and payment of rebates on oil, with the like intent."

Re: So A Blogger Walks Into A Bar…

#205

Post by invisible »

SkyMarshal wrote: post #202
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…

Grellas, what's your take on this Quora comment? In a nutshell, it's not illegal for collusion on the buy side, only the sell side: Tarun Nimmagadda, Mutual Mobile Co-Founder, COO http://www.quora.com/Who-are-the-Super-Angels-that-Michael-A... "The article was a fun read, but it is a false claim that this is illegal. Collusion, price fixing, and dividing markets is only illegal on the selling side. Think about how pe…

I know this was pointed at grellas, but I think this is a misunderstanding when we look at price fixing and collusion. The illegality of collusion is secretly forming agreements to benefit competitors at the expense of other parties. Words like defraud can succinctly help you understand whether it is illegal or not when looking at these agreements.

Re: So A Blogger Walks Into A Bar…

#206

Post by joshu »

bl4k wrote: post #186
joshu wrote: post #170

Earlier quoted context omitted.

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…

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 the impression that anyone is fixing the market, for what it's worth.

But thanks for the outrage and accusations.

Re: So A Blogger Walks Into A Bar…

#208

Post by jessriedel »

jon_dahl wrote: post #147
icey wrote: post #72

Earlier quoted context omitted.

According to Wikipedia [1], there were over 250,000 angel investors active in 2007. If 10 of those investors were to get together to form a "super-group", I'm not sure it would match up with the definition of a monopoly. I don't know anything about the collusion arguments though. [1] http://en.wikipedia.org/wiki/Angel_investor

The real question would be their investment market share, right? There might be 500 companies building operating systems, but a Microsoft/Apple merger would probably be a monopoly concern. That said, while their market share is certainly larger than 10/250,000, it probably doesn't even approach 10%. So you're probably right.

True, but you need to consider possible sub-markets. They might have much less than 10% of angel funding nationwide, but 60% of tech angel funding in the bay area. Or something like that. It all depends on how the regulators draw boundaries around markets.

Re: So A Blogger Walks Into A Bar…

#209

Post by grandalf »

It's important not to get too caught up in the legal technicalities. A strong startup (ideas/execution) still has tons of market power, no matter what a secret group of super-angels agree to do behind closed doors.

And, most importantly, bootstrapping is more feasible than ever and (as noted) YC is coming on strong.

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