Michael Arrington blogs that he was tipped off about a “secret meeting” between a group of “Super Angels” being held at Bin 38, a restaurant and bar in San Francisco. “Do not come, you will not be welcome,” he was told.
But he completely ignored this and decided to crash the not very private meeting.
Since Michael claims that nearly all the investors at the meeting were very good friends of his he writes that he did not think anything was amiss and expected a friendly hello and an invitation to sit down for a drink or two before being shooed off while they talked about whatever they thought should be kept off record.
But apperently this group of filthy rich men just freaked out when they saw him.
You see it seems that they were caught with their pants down. This group of investors, which together account for nearly 100% of early stage startup deals in Silicon Valley, have been meeting regularly to compare notes.
According to Michael’s sources the ongoing agenda of these meetings includes:
* Complaints about Y Combinator’s (another investor) growing power, and how to counteract competitiveness in Y Combinator deals (Anti-competitiveness)
* Complaints about rising deal valuations and how they can act as a group to reduce those valuations (price fixing)
* How the group can act together to keep traditional venture capitalists out of deals entirely (anti competitiveness)
* How the group can act together to keep out new angel investors invading the market and driving up valuations. 9Anti-competitiveness and price fixing)
* 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.
Michael goes on to explain what’s wrong with this
“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. 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.”