Ron Conway Drops A Nuclear Bomb On The Super Angels
techcrunch.com
techcrunch.com
For example, some of the panel at Disrupt were being rude (talking amongst themselves during a startup presentation), and he stopped everything and called them out on it. These weren't just random judges- they were some of Silicon Valley's most influential people. He never once took a shot at any of the startups presenting. He may have given people like Carol Bartz a hard time, but they can take it.
I may not necessarily want him as a friend, but I really respect Arrington. This email from Conway basically proves "yet again, Arrington knew what he was doing."
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Edits about the people posting below me:
- Leo Laporte: a) Leo Laporte can take it, and b) Arrington was merely asking for a disclosure. I don't think that proves me wrong.
- Last.fm: Linking to the official blog of a company being accused isn't proof. There's much more to the story that came after that (ie http://techcrunch.com/2009/05/22/deny-this-lastfm/; not to say linking to TC is any better)
- I'm sure Arrington has been wrong at some point.. I just said I couldn't think of anything.
Granted, I still wish he'd revise the inaccuracies in this article (http://techcrunch.com/2010/05/29/guy-who-copied-digg-slams-d...) but I'll take the fact that none of you remembered it as a good sign :)
All in all, bravo, Michael.
(Disclosure: kn0thing is an angel in Blueleaf, the startup I work for.)
That said, I love the Hacker Angels group. They represent a lot of what's right with angel investing.
Edit: Leo Laporte and the Palm Pre for those who have seen it
In response to your edit I was only posting because you said a) and b) not a) or b) and I don't think this falls into the category of b).
He wasn't asking for disclosure so much that he did not get a pre review unit so he was strongly biased against those who did since he went on even after disclosure was completed.
Leo Laporte takes quite a few shots at other people and can take it. It is often hard to listen to some of his "netcasts" because he does tend to be snarky about those flyover people.
// disclosure: I do contribute the $2/mo to TWIT
Perfect example.
I suppose you could hold him responsible for not preventing it from being published, but this wasn't directly one of his posts.
Back: http://www.last.fm/forum/21717/_/535934/5 and forth: http://techcrunch.com/2009/05/23/another-blanket-denial-by-l...
Since Arrington wrote two of the three articles, I guess I just figured he wrote the original too.
http://techcrunch.com/2009/07/14/in-our-inbox-hundreds-of-co...
Ron Conway to the super-angels: I'm in this game because I love seeing entrepreneurs build cool stuff. You guys aren't. Stop worrying about term sheets and valuations and worry about adding value beyond cash. I've wanted to say this for a long time, but have bit my lip in your presence. I no longer want to be involved with any of you. And Dave McClure, quit being a classless embarrassment to Silicon Valley.
When I read his email, my thought was that the email was a great image-building propaganda tool and that he wrote it with the knowledge that the email would be made public.
His email talks how great he is, how he loves entrepreneurs and how other investors are in it for self-serving factors like ego and money. Of course, I have no way of knowing whether that is true or not. However, I'm willing to bet that many unscrupulous investors could easily write a similar email.
I suspect he is mortified this got out. It must have been leaked by one of the super-angels themselves. Which is a little surprising, considering the things it says about them. There must be at least one super-angel so eager for attention that he believes there's no such thing as bad publicity.
I didn't leak ron's email, and I've been consistently public about this from the beginning.
the issue here isn't collusion, it's convertible notes.
your post on hi-def investing captures it perfectly, and some investor are likely not comfortable with that.
however I agree with you, and conv notes are definitely the future of early-stage investing...
angelgate sensationalism or not, that's the core issue here.
Maybe he wouldn't have written that email if this story hadn't been aired. Maybe he would have. But the email fits with his past actions, so to me it doesn't matter.
My guess is that he knew the email would be aired, and he wrote it to entrepreneurs as much as to the super-angels. His brand is all about trust-with-entrepreneurs, and if he loses that his deal-flow gets severely cut down.
To solidify that trust, he publicly threw down the line in the sand and said, "I'm on the entrepreneur's side. Always. I'm even willing to give up friendships / partnerships with these other investors to prove that loyalty."
I really like how he called McClure out. I know McClure is a smart guy and allegedly a great investor, but he is quite classless and the f* this f* that attitude is embarrassing to what are supposed to be a group of intelligent, successful, and perhaps caring individuals.
I also wouldn't say I turned him into a hateful caricature. There's no hate in there, I just think his writing style is classless. And if anyone is turning him into a caricature, it's himself.
If I had a friend who would only scream at people in real life, I would think less of him, regardless of how helpful he was. I do, in fact, have a friend who expresses himself like a douche online. I a) call him out for it frequently and b) think that he is a bit douchey. Still a great guy, and one of my best friends, but I would definitely say the way I look at him is changed by his online persona.
Hopefully that's the end of it. I'm sure none of them are genuinely bad guys. There's probably just a side of some of them that's a bit greedy and stupid. Hopefully this will be the lesson they all need to keep that side suppressed permanently.
If they are in actually involved in illegal collusion, they should be charged and prosecuted. I don't think it's sufficient to say the damage to the reputations of those involved is sufficient punishment if accusations of conspiracy are correct.
Here's my take: generally, people and life situations are very complex and the reality is that people don't neatly fall into categories of "good guys" or "bad guys".
Zoroastrianism really emphasized individual responsibility and thinking of individuals as good or bad. This made its way into Judaism and then spread into Christianity and Islam. Since our heritage as a nation is Christian, we have picked up this paradigm of thinking in terms of "good guys" and "bad guys". It also features heavily in our storytelling (movies). It's so much a part of our way of looking at the world that we actually think it's real.
tl;dr: People are too complex to be labeled "good" or "bad".
In other words, the point of them being "genuinely bad guys" or not is whether the affair should be allowed to blow over after a few firm but loving reproaches. staunch and cookiecaper are both speaking in the same terms, on the assumption that only "bad guys" need to be punished harshly, because non-"bad guys" want to behave well and just need a mild wake-up call now and then.
Rejecting the concept of individual people with persistent qualities forces you to argue in different terms, but it doesn't necessarily change the result of the argument. So let's talk about punishment from the opposite orientation:
People exist in complex fields defined by their personal relationships and social institutions. People tend to engage in behavior that results in comfort, advancement, and social approval, they and tend to avoid behavior that results in deprivation, loss of position, and loss of social capital. Harmful behavior is controlled by ensuring that personal relationships and social institutions punish bad behavior instead of rewarding it.
In this case, that means society should find out what these people did, enforce any laws against it, and (in the case of people who know them and work with them) shame them with disapproval and show an aversion to dealing with them. Otherwise bad behavior will flourish and affect more people. We do not want to be responsible for tempting people to behave in ways that are injurious to others, because aggressive, selfish behavior harms those who engage in it as well as their victims. If we, as a society, do not inflict just punishment on those who harm others, then aggressive, selfish behavior will increase, and there will be more suffering for both victims and aggressors.
tl;dr: Rejecting the idea of "genuinely bad guys" leads to the conclusion that they should be punished regardless of whatever personal characteristics might be ascribed to them.
The idea of individual punishment also was emphasized in Zoroastrianism and spread its way into the global human psyche. Punishment is a very natural tool for us but it's clumsy. I would elaborate more but it takes a lot of words to explain a different paradigm and uncover hidden assumptions.
I'm not saying you're wrong; I just want to note that thinking in terms of punishment is not the only way to think.
For example (got this all from Wikipedia; you can verify it there), the Code Of Hammurabi predates Zoroastrianism by hundreds of years. Wikipedia lists seventeen examples from the code; each example describes an individual punishment based on individual responsibility for an infraction. (Since I can't stop surfing Wikipedia now,) the Code of Ur-Nammu, "the oldest known tablet containing a law code surviving today," also prescribes individual punishments for individual infractions. It dates from the third millenium BCE, predating Zoroastrianism by over one thousand years.
People are extremely complex, and overall, bad or good (in relation to almost everyone's ethical standards).
The sun is extremely complex... but it is fair to call it "hot".
The idea that no one is "good" or "bad" is ridiculous. People can change over time, they can have messed up motivations, or emotional issues, but in the end people make conscious decisions that either are or are not moral and ethical by society's standards.
And here is the problem. Comparing people to the dominant ethical standards is not a good measure of their goodness or badness, it's a measure of how conformant they are to others' ethics. (Enter Godwin's Law, stage right.)
I don't think that we should vilify or exonerate yet. We should just sit on it and wait for reliable data to emerge. I was surprised that your post had so many upvotes because it jumps to an irrationally optimistic conclusion that none are "bad guys".
The correct conclusion based on the data we have is no conclusion, because nothing conclusive has been presented. It seems confirmed that a dinner was had and that many powerful angel investors were involved. That's about all that has been agreed upon so far. So why are you saying that none of these are "bad guys" when we don't know who was there or what they were doing?
You'd be surprised who's a bad guy and who isn't when it comes down to the wire. It's easy to be gracious when things are going well, and easy to appear gracious in a medium that you control.
And in any case, I merely suggested the terms of the law be enforced if it is found that the law was violated. This hardly amounts to a "burning at the stake".
PG vouches for him (which counts for a lot) so maybe it's completely legit and heartfelt.
If so, it does indicate a certain lapse of judgment on the author's part. Why on Earth would he think something this inflammatory would stay secret? It must be obvious to everyone involved that they have serious operational-security issues. There's no way something like this would be kept private when the members of the group couldn't even keep the existence and location of their meeting a secret from a notoriously trigger-happy (and widely read) blogger.
If it isn't heartfelt, then it walks through the checklist of everything you should do for damage control when you or someone in your circle faces an accusation of collusion / conspiracy:
- Loudly and vehemently disagree with the "bad group"'s philosophy;
- Explain the presence of the buddy in "bad group" in terms of how he didn't want to be involved but was sucked in and unable to escape. (Don't wave this type away as "bad judgment" since it implies guilt);
- Completely disavow the "bad" group;
- Keep focus on how you only care about "good group";
- Repeatedly assert that you always look out for "good group" and you would never allow anything bad to happen to "good group"
(Incidentally, the spelling errors were a particularly nice touch.)
The profile that his letter draws to mind strongly suggests to me that it was either:
1) authentic and written by him and only him
2) Masterfully manipulative and two steps ahead of me
You're right, the whole email did seem calculated to make himself look good. It sounds more crafted for its future audience (the whole web) than the mailing list.
Dropping a "nuclear bomb" would be something like, "I have a recording from the Bin 38 meeting that proves you were colluding. The FTC will start examining it at 9am sharp tomorrow morning."
Sure, it's unusual for someone to so strongly come out and call people out, especially people that he may want to invest alongside someday, but "nuclear bomb" is a serious stretch.
What I'm saying here is that Michael Arrington has plenty of room left for hyperbole, even now.
now that would be awesome!
hyperbole isn't a fancy word for exaggeration
I would love to know who was at this meeting and who got this email from Conway.
There are some useful short-term consequences of this:
1. These super angels probably don't trust each other anymore ("who tipped off Arrington?"). This is a good thing;
2. Meetings like this are less likely to happen in the short term. If they do, they'll probably be somewhere private (the back of a restaurant is not private); and
3. It highlights the importance and value of reputation and integrity (of which Conway's cup overfloweth).
Further to (3) there is this quote from JP Morgan:
> Asked: "Is not commercial credit based primarily upon money or property?"
> "No sir," replied Morgan. "The first thing is character."
> "Before money or property?"
> "Before money or anything else. Money cannot buy it...Because a man I do not trust could not get money from me on all the bonds in Christendom."
McClure got pissed off because of an article that didn't even provide names, went out and verified the facts of the meeting, attacked PG on some wild assumptions to the effect of "what goes around comes around", and his post goes from "the agenda was drinks, good food, & shooting the shit" to "in addition to pricing & valuation, some of the more interesting things discussed were.." basically confirming Arrington.
In the most childish way possible.
Apart from that semantic mixup, I've never understood why 'being defensive' is a bad thing. Someone accuses someone, not necessarily me, of something, I either defend or deny it and that is then taken as an admission of guilt, because "I'm being defensive". There's really no way out; I'm guilty whatever I say. It's a good thing this cultural mishap hasn't yet propagated to the courts of law...
NO, being defensive means seeing a lion and either standing still and hope it will go away, running for your life or attacking it ... either way, you're defending yourself in the presence of danger.
Of course it is not an admission of guilt.
Of course it is not an admission of guilt.
So, the defensive reactions by both Dave and Ron indicates that there is probably substantial and threatening truth behind Michael Arrington's post.
So, the defensive reactions by both Dave and Ron indicates
that there is probably substantial and threatening truth
behind Michael Arrington's post.
Edited for clarity.
The same way, I fail to realize how people don't understand that he writes in that style not because he lacks a few extra minutes but because that is a style and persona he's built over time.
It may personify douchebag to you and 82,482 other irrelevant strangers on the internet. More important, though, is what it personifies to the entrepreneurs looking to raise money. What you see as douche, many see as no-bs straightalking angel investor(whether accurate or not is irrelavant).
At the end of the day, his blog is a sales pitch to entrepreneurs. And from all that I can see, he has done pretty well. ie. he's scored many deals where the entrepreneurs see him as the no-bs guy; I'm not aware of any where an entrepreneur blatantly turned him down due to his writing style. Most that claim they would never raise money from him have never raised money and never will.
Conclusion: it's his style, it works for him and his goals, so he continues.
http://www.snoopdogg.com/news/ http://www.trapmuzik.com/news/ http://www.outkast.com/news
Dave McClure is free to write with the tone of a jerk all he wants. I don't know anything about him other than the post in question, but regardless of whether that's just his "style", I certainly wouldn't want to do business of any serious kind with him if it could possibly be avoided.
I'm not defending Dave's actions at this meeting, merely his writing style. I'm glad the Valley has room for the likes of Dave's writing style. The day the Valley values professionalism over actual value give is the day I leave, since I can go to Wall Street for that. Suits and the Whole Nine Yards.
The second time I'll invoke Tara: "The less confident you are, the more serious you have to act." - Tara Ploughman
Everyone starts writing to please other people through resumes, cover letters, thank-you cards, and apologies. But once you have enough money like Mcclure, you can say "Fuck you" when you want to and not worry about losing your job.
And that's exactly what he did.
Thanks, Ron, for calling a spade a spade. I watched an interview with Ron about a year ago, and I found him to be very forthright, insightful, sincere, and professional - and clearly one who wants to try to help entrepreneurs out as much as he can. He seems to be a good role model for entrepreneurs. Thanks too to Mike Arrington for breaking the story and to Mike and his team for their follow up reports.
I think that is the essence of his persona. The whole justification for it-- I'm smart and I have money so I don't have to show anyone respect. Deal with it or leave.
It reminds me of my concept of ancient Rome for some reason. A place where power ruled, rather than the concept of egalitarianism.
He's acting like the kids in junior high who thought they were being rebellious by shopping at Hot Topic and dressing punk. He's just replaced one style for another. He's not text messaging his rant, he published it online. If he's so rich and too busy, then pay an assistant to edit it. Everything you do is a representation of yourself.
But my whole point is that there's more people like him that don't feel like writing perfectly. As you just admitted, it takes extra effort to write for your audience instead of writing for yourself. And why would he bother to hire an assistant to edit it? That also takes effort.
Warren Buffet obviously has the choice to behave in the same manner. He also has the choice to be reckless like Larry Ellison and fly jet fighters, or be like the Koch brother's and spend millions on libertarian think-tanks to anger a large democratic populace. Or conversely, why does Buffet choose to anger countless libertarians by saying he and other billionaires should pay a higher tax rate than his secretary? If he was a truly wise businessman, he would refrain from political statements like that.
My point is that wealth makes people more confident in revealing their idiosyncrasies. Whether or not you like their true personality is another story. Amusingly and relatedly I've lost over 20 karma points for telling what people don't want to hear even though I do not support Dave McClure's behavior.
I seriously don't understand how people were defending his writing style.
I explained that his writing style is defensible because he doesn't care about the general audience. And if there were more people as rich as him, you'd see more people not bending over backwards with perfect grammar and an apologetic tone.
Just because you don't like it doesn't mean he isn't justified in sounding off if it makes him feel better.
So it's more selfishness than self-righteousness that leads me to criticize his particular style.
I can predict two things;
1) The younger angels react and further split themselves from the Ron way of doing business. or
2) You will hear no more about this public debacle. It's clearly bad for business and any smart investor will shut up now.
In fact, being part of a macho secret conspiracy will probably inflame them to further stupidities.
There is another (sneaky) explanation.
Ron simply sent out many of these emails to different people with another word with incorrect spelling. This allows you to identify exactly who leaks the message. This is an old "intelligence" trick used to identify the source of information leaks.
Just email each individually.
If it's sent directly to one person, he would think twice before leaking it.
Anyway, this whole *gate crap is inane.
And do so by having the "To" line be yourself, and the addressee in the "Bcc" line - that way the addressee will think others are getting it too.
McClure's post - through both its style and its content, left an opening for Conway to come out with this email. Dave is stuck now, and his only response from here is to come clean in some way and clear the air.
McClure has made all sorts of mistakes, first the blog post, and then the accidental tweet. He is not handling this very well and I feel for him because he is the only person from the dinner who is speaking out. The other people in attendance are suspiciously quiet (and giving away that they were there by being quiet) and leaving it to Dave to do the talking (and not doing a very good job for himself or for the rest of them).
Edit: I just realized I read the posts backwards. I suppose it's not fake if that's actually what Dave McClure was referencing in his deleted tweet. Still. Perhaps these "super angel" could do with some spelling and grammar lessons. (Yes, I could probably use some too.)
I didn't see any "feeling superior" at all in what nkohari said. You don't have to feel superior to someone who is behaving childishly just because you don't want to be around them. And I don't think he was targeting "everyone there" either. He just said Silicon Valley was "full of drama and ego wars". Now, perhaps "full of" is overly strong. I'm sure there are plenty of level-headed people in the mix too. But I don't doubt from what I've read and seen that there is plenty of "drama and ego wars" to go around.
You also completely misinterpreted what I was saying, but I suspect you're not interested in that anyway.
L.A. = High school for adults
New York = College for adults
Silicon Valley = Middle school for adults
That's not meant as pure criticism, I actually kind of like it, but it just gets annoying at times.
Also, if Silicon Valley were middle school for adults, there'd be more girls here.
There really is an overwhelming aura of "you don't get taken seriously unless you're in the Valley" which gets a bit grating when you have legitimate reasons for living elsewhere.
The OP simply means that the grass isn't always greener.
There's this ugly thing in American business where money is made on making things overly complicated. Where instead of trying to solve economic problems people are just trying to win at chess.
Either way, if anyone gets the privilege of defining a new spelling for the word, Ron is a good candidate.
I think the community should embrace the new spelling, in appreciation. :)
Wouldn't this kind of business be better transacted on a yacht or submarine?
This email reeks of someone trying to steer clear of trouble and keep their name clean.
It also reads more like a public blog post, not a private email.
I wouldn't be surprised if Conway tipped TC himself.
Am I right in thinking Conway attended two meetings? If he disagreed so strongly with what was being discussed, why return for the 2nd?
Did they do something wrong? Hell yes. But it's been exposed, examined, and discussed. Publicly stoning a group of angels represents the worst kind of mob behavior and reflects poorly on entrepreneurs as an investment class. Let's not forget that wealthy individuals have many different options for investing their money that historically have higher rates of return (i.e. make more money) than investments in startup companies. Many angels invest in startups because it's more fun than profitable. Let's not change that dynamic in spite of ourselves.
At the end of the day, we want angel investing to be the biggest game possible. It's a surplus of angel money that has put entrepreneurs in the driver's seat and made term sheets extremely favorable to founders. Fewer angels in the mix and the scenario can change quickly.
It's time to prove that we're better than a small group of angels who engaged in such unfortunate behavior. It's time to forgive and move on.
Personally I look forward to the shakeup. The money will find its own level, whether its this group of idiots or some other.
If each sentence was not.
Its own paragraph.
So true.
Oh please! We're all capitalists here, nothing to be ashamed of.
Next morning I delivered my prioritized list to him - work was #12. Try it, you will be surprised.
Don't get me wrong, money is part of the equation for me, but certainly I won't sacrifice health, family, security etc for a little bit more of it (or for a particular job etc).
As far as I understand, Angel List is an effort to create a centralized curated marketplace for angel investing. Seems very similar to AngelGate. Even if these are unrelated, I wonder, whether Angel List can be viewed as something against competition.
On the other hand, Angel List simplifies angel fundrising a lot and therefore is beneficial for entrepreneurs.
AngelList is the single most democratizing, pro-competitive thing that has happened to tech startup investing in a long time.
(Disclaimer: i'm one of the angels on the list)
(Worth it.)
Though, I appreciate Ron's willingness to speak out against the collusion of these investors to wreak havoc on their competition.
At first, I admired Tech Crunch for having the guts to post something like it but looking it over there's no substance to it. It's just yellow journalism for the digital age. Complete rubbish that feeds into the collective psyche.
If Arrington had any sense he would have kept quiet and not divert attention to a debacle through TC at the cost of start-up community.
In Arrington's case, he gave the world a front-row seat in a meeting where the participants thought they were in private -- this is a very good thing in my opinion. With few exceptions, transparency is a win for society and business because it keeps people honest.
Arrington's report puts the "secret-meeting participants" on notice that they can't get away with this kind of thing, and it also alerts entrepreneurs to watch out for it. Both very good things.
All the drama will probably blow over in a few days, and in the end both the super angels and entrepreneurs will be better off for this ethics-check having occurred.
Ron's email is great. I do wonder why he didn't write it before this whole thing broke. I'm guessing it would have been even tougher.