Newslines lets you create cool news timelines about your favorite people and products. Register now!
Michael Arrington Y Combinator

Angelgate blog post

21 Sep, 2010

Arrington posts about a meeting of angel investors at Bin 38 in San Francisco, who account for ‘nearly 100 percent of early stage start-up deals in Silicon Valley‘. He doesn’t identify the people at the meeting, but says sources give him information on what the meeting is about:

  • Complaints about Y Combinator’s growing power, and how to counteract competitiveness in Y Combinator deals
  • Complaints about rising deal valuations and they can act as a group to reduce those valuations
  • How the group can act together to keep traditional venture capitalists out of deals entirely
  • How the group can act together to keep out new angel investors invading the market and driving up valuations.
  • More mundane things, like agreeing as a group not to accept convertible notes in deals (an entrepreneur-friendly type of deal).
  • One source has also said that there is a wiki of some sort that the group has that explicitly talks about how the group should act as one to keep deal valuations down.

He says the meeting raises serious concerns:

Collusion and price fixing, that’s what. It is absolutely unlawful for competitors to act together to keep other competitors out of the market, or to discuss ways to keep prices under control. And that appears to be exactly what this group is doing. This isn’t minor league stuff. We’re talking about federal crimes and civil prosecutions if in fact that’s what they’re doing.