Silicon Valley Angels Accused of Collusion and Price-fixing

Posted by amabaie under News
From http://techcrunch.com 5157 days ago

Just about every major angel investor in Silicon Valley appears to be involved in criminal "collusion" and "price fixing". This is pretty shocking.

"In the back of the restaurant in a private room was a long oval table. Sitting around the table, Godfather style, were ten or so of the highest profile angel investors in Silicon Valley. These investors, known as "super angels" because they have mostly moved on to launch small venture funds of their own, are all friends of mine. I knew each person in the room very, very well."

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Comments

Written by ShawnHessinger
5157 days ago

I suspect I'm in the minority on this one, but the problem, in my view, isn't so much that this kind of nonsense goes on but that government officials are quite likely to overreact to it impacting smaller businesses in ways not yet imagined. Price fixing and collusion occurred in many small markets across the U.S., and elsewhere I'm sure, in times past, even before the growth of big business as we know it today. In those days, when communications and resources may have been more limited, this may have actually been a problem. Today, in the age of the Internet, the idea of a couple of guys sitting together in a room in San Francisco and deciding how to manipulate the future of tech business is kind of laughable...no matter who they are. Regrettably, the Fed is almost certain not to think so and instead will likely pass, or try to pass, a bunch of invasive legislation that will further curtail much needed cooperation and collaboration among smaller businesses who cannot hope to ever control the market in the way these angels are allegedly proposing. (There other option would be to simply investigate to determine whether, in this instance, a crime was committed, but I hold out little hope that this will be the end of it.) Just my two cents, but any kind of collusion intended to control markets is largely a horse and buggy strategy in an age of instant communication and rapid networking. And so, probably, is the notion that government legislation is needed to prevent it.

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Written by amabaie
5157 days ago

I share this just because it is one of the last places you would think of as a cartel, where investors are supposedly in heated competition to find the "next big thing". In business, never let your guard down, don't make assumptions.

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