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Angelgate is a controversy [1] surrounding allegations of price fixing and collusion among a group of ten angel investors in the San Francisco Bay Area. [2]
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Angelgate is a controversy [1] surrounding allegations of price fixing and collusion among a group of ten angel investors in the San Francisco Bay Area. [2]
The scandal began in September 2010 after Michael Arrington, editor of the TechCrunch publication, wrote in his blog that he had been turned away from a secret meeting among so-called "super angels" he knew, [3] held at Bin38, a wine bar in San Francisco's Marina District. [4] The participants at the meeting, among other things, discussed how they could compete with other angels, venture capitalists, and the Y Combinator business incubator for the limited pool of worthy investment opportunities. [5] Arrington said that after the meeting, he had been informed by two of the attendees that the investors had discussed how to fix low valuations for new start-up companies, and how to keep better-funded venture capitalists from investing. [6]
The blog became the subject of discussion among the Silicon Valley start-up community over the next several days. [7] [8] Investor Ron Conway, whose business partner attended the meeting, wrote an email highly critical of the angels involved and called the event "despicable and embarrassing". [9] Dave McClure, a well-known angel present at the event, [7] wrote in a blog that Arrington's account was inaccurate, and a tweet (later deleted) complaining about Conway. [10] Chris Sacca wrote a lengthy email that defended the participants and was critical of Conway, which was also leaked to TechCrunch. [11]
Reports arose that the United States Federal Bureau of Investigation began reviewing the incident. [12]
There was skepticism that there was actually any collusion or that price fixing could succeed if it was attempted. [1] [13] [14] The event also gave rise to various online cultural phenomena. Among other things there was a flash mob at the wine bar, a Hitler Downfall parody, a spike in the establishment's Google rank, a number of Twitter jokes, [4] and so-called "fakeplans" for super-angel meetups on the site plancast.com. [7] On Monday, September 27, 2010, Ron Conway, Dave McClure, Chris Sacca, and others appeared at a panel discussion hosted by Arrington at his "TechCrunch Disrupt" conference in San Francisco [15] [16] where, despite Arrington's prodding, they avoided a "Jerry Springer moment". [17]