Last week, TechCrunch blogger Michael Arrington was informed that a secret meeting between Silicon Valley angel investors was taking place in a San Francisco restaurant. He was told not to come, since “[he will] not be welcome.” He went anyway.
The tip turned out to be accurate. He found a handful of the most prominent Silicon Valley angel investors conducting the meeting in a private room. Arrington knew the attendees well. The group, Arrington said, “[accounted] for nearly 100% of early stage startup deals in Silicon Valley.”
At first blush, the whole thing appears to be above board. Look, it’s just a bunch of investors looking to catch up and compare notes, right? What’s wrong with that?
Nothing at all, until you discover, as Arrington did, that the meetings were regularly held and that the agenda included collusion and illegal price fixing. According to Arrington, the “super angels” have discussed, among other things, how they can “keep traditional venture capitalists out of deals entirely,” and “keep out new angel investors invading the market and driving up valuations.”
This is serious federal crime territory, which is bad enough. In the grand scheme of things, what’s worse is that this group has been acting contrary to the interests of the innovators that they purport to be helping. By keeping potential investors from entering their sacred sphere, these so-called angel investors have been crippling the development of potentially game-changing systems.
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