Angelgate facts for kids

Angelgate is the name given to a big discussion that happened in 2010. It was about whether a group of ten angel investors in the San Francisco Bay Area were secretly working together. People wondered if they were trying to unfairly control the prices of new company investments. This is called price fixing or collusion.

What Happened?

The Start of the Problem

The whole story began in September 2010. Michael Arrington, who edited a website called TechCrunch, wrote about it. He said he was not allowed into a secret meeting. This meeting was for powerful "super angels" he knew. It took place at a wine bar in San Francisco.

At the meeting, these investors talked about how to compete with other investors. They also discussed how to find the best new companies to invest in. Michael Arrington later heard from two people at the meeting. They said the investors talked about keeping investment prices low for new start-up companies. They also discussed how to stop bigger investors from joining in.

The Discussion Spreads

Michael Arrington's story quickly became a big topic in the Silicon Valley area. This is where many tech companies are located.

• A well-known investor named Ron Conway was very upset. He sent an email saying the meeting was "terrible and embarrassing." His business partner had been there.
• Dave McClure, another angel investor at the meeting, wrote online that Arrington's story was wrong. He also posted a message (which he later deleted) complaining about Ron Conway.
• Chris Sacca wrote a long email defending the people at the meeting. He also criticized Ron Conway. This email was also shared with TechCrunch.

What Happened Next?

People heard that the Federal Bureau of Investigation (FBI) in the United States was looking into the incident. This meant they were checking if anything illegal had happened.

Public Reaction and Fun

Many people wondered if there was really any secret agreement. They also doubted if such a plan could even work. The event also led to some funny things online:

• A group of people did a surprise dance (a flash mob) at the wine bar.
• Someone made a funny video parody using a scene from the movie Downfall.
• The wine bar's name became very popular in Google searches.
• Many jokes were shared on Twitter.
• People made fake plans for "super-angel" meetings online.

On September 27, 2010, Ron Conway, Dave McClure, Chris Sacca, and others met. They were on a panel at Michael Arrington's "TechCrunch Disrupt" conference. Even though Arrington tried to get them to argue, they kept things calm.