Palo Alto, Calif. – A group of powerful Silicon Valley angel
investors recently held a meeting at which they allegedly colluded to fix
valuations and keep new angel investors and established venture capitalists off
their turf, according to a report by Michael Arrington at TechCrunch. Arrington
cited three sources who were at the meeting, attended by investors who
"together account for nearly 100% of early stage startup deals in Silicon
Valley," he wrote.
"This isn’t minor league stuff. We’re talking about
federal crimes and civil prosecutions if in fact that’s what they’re doing. I
had a quick call with an attorney this morning, and he confirmed that these
types of meetings are exactly what these laws were designed to prevent,"
Arrington added.
The group also reportedly discussed how to stymie the growing
power of start-up incubator Y Combinator, and established a wiki "that
explicitly talks about how the group should act as one to keep deal valuations
down."
In a response to the story, angel investor Dave McClure, who was
present at the meeting in question, called Arrington "dead f***ing
wrong" in a blog post.
Related Links:
http://tinyurl.com/3926owz
(PEHub.com)
http://tinyurl.com/2vkveaz
(Dave McClure’s blog)
http://tinyurl.com/26xdmmt
(Valleywag)
This doesn’t particularly surprise me.
God bless the child who has their own capital.