Over a dozen investors have backed a new early stage venture capital firm called CrunchFund, founded by Michael Arrington and Patrick Gallagher, to the tune of $20 million. Arrington will continue to write for TechCrunch but will have no editorial oversight.
He also will continue to report to Arianna Huffington, who runs AOL’s media properties. Erick Schonfeld, who has served as TechCrunch’s co-editor, will serve as interim editor while AOL seeks a replacement. TechCrunch is a key source of information about developments in tech, with about 3.6 million monthly visitors according to comScore.
CrunchFund investments were led by $10 million from AOL, with participation from Accel Partners, Austin Ventures, Kleiner Perkins Caufield & Byers, Greylock Partners, Redpoint Ventures, Sequoia Capital, Marc Andreessen and Ben Horowitz of Andreessen Horowitz, each of the general partners of Benchmark Capital, Ron Conway, DST Global’s founder Yuri Milner, and Kevin Rose. The Wall Street Journal reports that AOL sought to be the sole limited partner of the fund but that Arrington preferred a broader base.
Arrington started TechCrunch in 2005 and sold it to AOL in April for a reported $30 million. He became a limited partner in Benchmark Capital and SoftTech VC at that time, adding to his numerous other angel investments, and Gallagher has been a partner at VantagePoint Capital Partners since 2008.
As the New York Times reports, Arrington is a larger-than-life character who has been criticized for investing in companies that he or his team are likely to cover. Detractors feel that TechCrunch may be overly kind to companies Arrington invests in and perhaps reluctant to cover those companies’ competitors.
Wall Street Journal – http://tinyurl.com/44gnomm
New York Times – http://tinyurl.com/3e5fu3d
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