The VC world is abuzz this morning with Mike Arrington’s report about a “secret meeting” of super-angels in San Francisco. He alleges collusion against both entrepreneurs and traditional VCs.
One of the meeting participants, Dave McClure, has already written an entertaining screed against Arrington’s report, and I don’t have enough inside knowledge to take sides. However…
There seems to be an inherent contradiction in Arrington’s story: If super-angels are planning to price-fix, wouldn’t that enable the very “traditional” VCs that they are purporting to thwart? If McClure, et al. begin offering below-market terms, wouldn’t the large checkbooks be emboldened?
Moreover, the very reason that so many individual angels became super-angels was to reduce the need for deal syndication. This would seem to encourage it, since meeting participants would need to work together in order to preempt the aforementioned competition.
Finally, I rarely believe in collusion reports. Sure it sometimes happens (see Gedman, Rich), but usually it’s a lot of hot air (see buyouts, big).
I wrote the above in this morning’s daily email (sign up here), and already have gotten a bunch of emails from true believers. Here is one of the more thoughtful ones, from a successful (non-angel) venture capitalist: