The 1% illuminati Lithium-Gate VC’s- Rigging Washington DC for profit at the expense of the public

The 1% illuminati Lithium-Gate VC’s- Rigging Washington DC for profit at the expense of the public!

fellowshipWho are the “Lithium ion VC’s”? Say “Howdy” to the ACTUAL 1% Illuminati!

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This matter has absolutely nothing to do with whether or not you like solar power or electric cars or gasoline or fracking or one technology over another. It has nothing to do with climate change; not a single thing. This is totally about banking, securities and finance fraud.

It is entirely about organized crime racketeering kickbacks arranged by arrogant frat-boy billionaires who sought to buy government, buy power, buy ego-trips, kill competitors and monopolize industries for personal gain in exchange for campaign efforts.”

A U.S. Senate Source

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Watch the 60 Minutes episode: “The Cleantech Crash”, below, that began the series of 2014 expose events coming over the next 6 months:

The lobbyists called “Think Progress” (many of those targeted by investigations work, or worked there) and others, funded by the VC’s, have started massive spin to call it a bunch of lies and say that “No, No, it was really a big success”, but the facts, the criminal investigations and the money trail speak for themselves. It doesn’t matter if you are Democrat or Republican, it matters if you want billionaires buying your government and cutting you out of the loop.

D- LA Times

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Now watch the 60 Minutes episode about how it was done:

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The Democrats needed cash for the campaign. Democrats are always poor, so they never have enough money. The campaign staff went to the Silicon Valley Vc’s and said that if they paid for the campaign costs up front and rigged the search engines to only promote the Democrat candidates, then the campaign would give them $100 Billion of tax money that they would not have otherwise gotten, once the Democrats had control of the DOE slush fund. So they did, but they got caught by their greed, and now they need to go to federal prison.

It’s as simple as that!

E- Heritage

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Note From Victims: Multiple SOMO reporters/writers have spoken with a number of victims of this series of hits organized by the same group of people. If any major law firms (Multiple firms can file) begin the process of filing a class action RICO or damages action on behalf of the victims: Arrington, Assange, Eberhard, Brown, Conway, DM, Steve, Lakatos, Katie, AL, Etc… It is highly likely that a number of other victims (over 20+) will join the cases once they are filed and publicly noticed. Substantial evidence and testimony now exists and recoverable assets in potential court-ordered awards, from the attackers, exceed $50B+ in possible recoveries for damages caused by their organized efforts against these competitors and reporters. In other words, big class-action law firms, according to many plaintiff candidates: “if you file it, they will come.”
DFG, YY, DS,  SAT/LAT/NYT

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Seriously…
…Don’t get your panties in a knot about saving electric cars or solar panels. They are NOT AT RISK. There are a ton of solar panel companies doing gangbuster business and you can buy all kinds of electric cars, from many companies, right now. Those things are safe. They are doing fine. Don’t let the VC media shills play your feel-good heart-strings. By complaining about political corruption you are not going to destroy the planet. You are going to destroy corruption. Got it? Green energy is doing fine but Corruption is also doing fine. Let’s stop the corruption and let the green energy keep on keepin’ on!

Bradley T-  SF Chr
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Did they break the law? Multiple federal agency & committee probes now asked to look into organized crime charges over kickbacks.

The Westly Group (Under Investigation)
Ira “Linguini” Erenpries (Under Investigation)
Firelake Capital  (Under Investigation)
John “Doe” Doerr  (Under Investigation)
Kliener Perkins (Sued for Sexual Abuse)(Under Investigation)
Elon “The MuskRat” Musk (Sued on multiple charges of fraud by shareholders)
Steve “The Fix” Westly  (Under Investigation)
Ray “The Sausage” Lane (Charged with Tax Fraud)
Steve Jurvetson  (Under Investigation)
The Google Boys  (Under Investigation)
Jonathan” Slippery” Silver (Fired) (Under Investigation)
Tom Perkins (Under Investigation)
Tim “I want-to-run-my-own-state” Draper (Under Investigation)
Draper Fisher (Under Investigation)
Vinohd Khosla and Connie Rice (Under Investigation, multiple documentaries)
Khosla Ventures (Under Investigation)
Tom “Fettucine” Styer
(Under Investigation)
Steven “The Rat” Rattner (Indicted)
Raj “I-Am-Untouchable” Gupta (Indicted)

Hey Now… when you look at: their lobby hires, payment disclosures and blind SUPERPAC’s, which lithium ion interests they own or control and when you follow the money, it gets pretty ironic...

They are all friends of silicon valley’s “McKinsey” DOE Secretary of Energy Steven Chu; McKinsey DOE $$ Guy Matt Rogers & McKinsey DOE $$ Guy Steve Spinner (They paid to get them appointed). McKinsey staff have previously been put in Federal prison for rigging things, ie: Rajat Gupta.; and are under investigation world-wide.

They contracted a silicon valley consulting company called McKinsey Consulting and told McKinsey to write all these white papers for the White House and Federal Agencies that said: “lithium ion is the key to the future“. Then they bribed and influenced and “Revolving Door’d” to put Chu at DOE (Silicon Valley VC’s were the primary nominators of Chu per his nomination file docket) and they invested in all of the Lithium while their guy: Chu, (working with Rahm Emanual, Valarie Jarrett, David Axelrod and Robert Gibbs) handed out all of the taxpayer money to their investment projects. Easy Peasy. Scam.

Which Senator did they interact with the most? Which West Wing Chief of Staff?… See the latest Senate investigations and Class Action lawsuits for more. The Pope just hired McKinsey to fix “Vatican Corruption”.. Maybe not such a good idea?

Recordings and emails appearing soon. Many agencies, committees and media groups are now investigating, or have been asked to investigate by senior Congressional staff. Since Reid went “nuclear”, the gloves are off, it seems.

Do your own research. Check out every name mentioned and all of their past connections. Nowadays, it isn’t that hard to research. All of the parts of this have been mentioned in the mainstream press as of now.

Reporters asking to FOIA review the original Solyndra case # and case #’s hyphenated off of the Abound, Solyndra, and similar cases case #’s are having the best luck in story leads.

“One is building the new Bohemian Grove on the California coast at Half Moon Bay. One has started a Jr. Illuminati initiation program for young recruits that begins in the Stanford dorm rooms. One has publicly been charged with multiple crimes. One runs the technology suppression team for the NCVA. One has broken the record for hiring local escorts. Come watch the fun!

It’s non-stop hijinks with those crazy old boys from the Tech Branch of the Illuminati. Stay tuned for each episode of this made-for-tv romp that is guaranteed to be great fun for the whole family.”

Elon Musk, and these sorts of ego-maniac billionaires, do not care about regular people or customers. They exist for the joy they get in manipulating power and control and tend to do things like this:

KL, HJK, H, TH, JKL, PROPU- Denver News, LA Times, WSJ, BB, Susu

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fellowshipSilicon Valley: Satan’s Frat House?

Are Silicon Valley Angel Investors Colluding Over Deals? | Techdirt

Sep 22, 2010 … While there are plenty more angels in Silicon Valley than just 15, it is … Every industry has a dark side – most of us can’t see it and therefore, we forget its there. … VC investors would be wise to not attract the government with …

http://www.techdirt.com/ articles/ 20100921/ 18574611100/ are-silicon-valley-angel-investors-colluding-over-deals.shtml – View by Ixquick ProxyHighlight

Tim Draper Wants To Split California Into Pieces And Turn …

Tim Draper Wants To Split California Into Pieces And Turn Silicon Valley Into Its Own State. Posted yesterday by Gregory Ferenstein (@ … He says he’s submitting a polished version to the state’s Attorney General in the form of a ballot proposition proposal within the next 48 …
techcrunch.com/2013/12/19/tim-draper-six-californias-s…

Silicon Valley: Full of Arrogant-heads Who Hate San Francisco …

Some of them want to secede from America, … Silicon Valley’s Ultimate Exit,” Balaji Srinivasan argued that tech founders should leave the U.S. and form their own independent state, run by technology. … the venture capitalist, …

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Steven Lawrence Rattner

(born July 5, 1952) is an American financier who served as lead adviser to the Presidential Task Force on the Auto Industry in 2009 for the Obama administration.[1]

New York Pension Fund Investigation

In 2005, Quadrangle made payments to private placement agent Hank Morris to help Quadrangle raise money for its second buyout fund.[13] Morris had come highly recommended to Rattner from U.S. Senator Charles Schumer.[14] Morris was also the chief political advisor to Alan Hevesi, the New York State Comptroller and manager of the New York State Common Retirement Fund (CRF), which invests in many private equity funds. Morris told Rattner he could increase the size of the CRF investment in Quadrangle’s second buyout fund. Rattner agreed to pay Morris a placement fee of 1.1% of any investments greater than $25 million from the CRF.[15]

In 2009, Quadrangle and a dozen other investment firms, including the Carlyle Group, were investigated by the U.S. Securities and Exchange Commission for their hiring of Morris. The SEC viewed the payments as “kickbacks” in order to receive investments from the CRF since Morris was also a consultant to Hevesi.[16] Quadrangle paid $7 million in April 2010 to settle the SEC investigation, and Rattner personally settled in November for $6.2 million without admitting or denying any wrongdoing.[17]

Prosecution by Attorney General Cuomo

The case drew significant media attention when Andrew Cuomo, the New York State Attorney General, demanded more severe penalties from Rattner than any of the other firms or individuals who had hired Morris as a placement agent.[18] Rattner was once a major fundraiser for Democratic Party candidates including Al Gore and Hillary Clinton, but Rattner had repeatedly passed on fundraising for Cuomo despite Cuomo’s past attempts to cultivate Rattner’s support.[19]

In an appearance on the Charlie Rose Show, Rattner asserted that hiring Morris as a placement agent was “legal then, legal now, and done properly.”[20] He explained he was willing to settle on reasonable terms as he had done with the SEC, but questioned whether Cuomo was motivated by the “facts” of the case and called Cuomo’s demands “close to extortion.”[21]

On December 30, 2010, Rattner reached a settlement with Cuomo to pay $10 million in restitution but no fines or penalties. He was not prohibited from continuing to protest his innocence.[22]

Wikipedia

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300px-Bloomberg_logo_svg

Ray Lane Rode Tech Boom Tax-Shelter Wave Broken by IRS
By Andrew Zajac & Jesse Drucker

The dot-com boom of the late 1990s has come back to haunt former Hewlett-Packard Co. (HPQ) Chairman Ray Lane.

Lane’s dispute with the Internal Revenue Service opens a window to a mostly bygone era when accounting and law firms conceived and sold tax-dodging strategies to investors seeking to avoid taxes on outsized gains from the still-swelling tech bubble.

A file photo shows Hewlett-Packard Co. former Chairman Ray Lane speaking during the Wall Street Journal ECO:nomics conference in Santa Barbara, California, during March 2011. Photographer: Jonathan Alcorn/Bloomberg

The shelters had memorable nicknames, based on acronyms: Son of BOSS, BLIPS, PICO and COBRA. Lane used one called POPS.

Then the IRS cracked down, triggering the kind of legal battles with the agency Lane is now embroiled in.

“Most of these types of tax shelters have flushed through the system,” said Bryan Skarlatos, a tax attorney at Kostelanetz & Fink LLP in New York. “The ones like you’re seeing with Lane are some of the stragglers.”

“It’s not the very last dinosaur caught in the tar pit, but it’s one of the last,” said Skarlatos, who represents clients in disputes with the IRS over POPS transactions.
Tax Bill

Lane, also the former president of Oracle Corp. (ORCL) and partner emeritus at venture-capital firm Kleiner Perkins Caufield & Byers, used POPS in an attempt to shield $250 million of income through what the IRS ruled were “sham” transactions.

Lane, 66, who left Oracle with more than $1 billion in stock and stock options in mid-2000, has agreed to settle with the IRS on a tax bill that could be as much as $100 million, even as he appeals the agency’s ruling in U.S. Tax Court in Washington. He said he fully paid his tax bill on sale of his Oracle options.

“My tax advisers put me into an investment,” he said in an interview. “Somewhere along the way I knew these things were being questioned by the IRS.”

The investment totaled $25 million, Lane said, and included an $18 million up-front payment used to fund startups.

A portion of that went to purchase warrants or stock options in five companies, including RocketGas Inc., Kleptomaniac.com. and Spectrum Target Detection Inc., according to a filing in one of at least five U.S. Tax Court cases involving Lane’s tax shelter investments.

Tech Startups

RocketGas was described in court papers as a business to “bring services traditionally available only at a gasoline station to customer’s home or office.”

Kleptomaniac.com was an “e-commerce solutions provider and e-tailing consultant” to brick-and-mortar retailers and Spectrum had developed a traffic radar gun that “was expected to replace traditional speed measuring devices used by law enforcement agencies.”

“Like most high tech startups which seemed so attractive in 2000, that high risk, high reward portfolio proved worthless within three years and petitioner simply seeks to recognize the real, hard-cash economic loss,” one of Lane’s lawyers argued in a court filing. Losses for the five companies totaled about $17 million, according to another filing.

The IRS argued that the investments in the companies “were payments of fees to promoters of listed and/or abusive tax avoidance transactions.”
Other Investors

Lane and other investors didn’t establish the value of stock options or warrants in an “amount greater than zero,” and as a result, no losses were allowable, IRS lawyers wrote.

Lane said the POPS shelter was assembled for him by Sidley Austin LLP, a Chicago-based law firm, the BDO Seidman consulting firm and Deutsche Bank AG, he said.

Deutsche Bank, Germany’s largest bank, admitted criminal wrongdoing in 2010 and agreed to pay $553.6 million to avoid prosecution over its participation in 15 fraudulent tax shelters, including POPS transactions.

The bank admitted to involvement in at least 1,300 deals, helping more than 2,100 customers evade about $5.9 billion in individual income tax on capital gains and ordinary income, according to a settlement agreement with the Justice Department.

Duncan King, a spokesman for Frankfurt-based Deutsche Bank, and Jerry Walsh, a spokesman for BDO, declined to comment on Lane’s remarks. Sidley Austin didn’t reply to phone and e-mail messages requesting comment.
Conspiracy Charge

BDO, now known as BDO USA LLP, said in June 2012 it would pay $50 million to settle a charge of tax-fraud conspiracy for helping wealthy individuals evade about $1.3 billion in taxes from 1997 to 2003.

In 2011, a jury convicted former BDO chief executive officer Denis Field and three others of more than 20 criminal counts including conspiracy and tax evasion.

A judge threw out Field’s conviction after finding that a juror lied about her past. A re-trial is pending.

POPS stands for Partnership Option Portfolio Securities.

Though it has multiple variations, a POPS transaction, in general, worked like this: an accounting firm would set up a series of partnerships, which would typically enter into transactions called straddles using foreign currencies.

Straddles involve simultaneously taking long and short positions to offset the investment risks.

Offsetting Loss

The partnership would sell off the position that generates the gain, which would be attributed to a partner that would be indifferent to the tax, such as a tax-exempt entity.

That would leave one of the partnerships with the offsetting loss.

An investor with a big gain somewhere else could then buy into the partnership and thus take advantage of the loss.

The IRS attacked such transactions for separating out the losses from the gains.

The IRS case against Lane’s Vanadium Partners LLC mentions “a series of meaningless steps,” involving a straddle, a tiered partnership structure and a transitory partner that allowed “a tax shelter investor to claim a permanent non-economic loss.”

Lane’s attorney, Charles Hodges, disputed the IRS contention that Vanadium was a sham that “lacked economic substance.”

In addition to the tech boom, conditions were ripe for tax shelters in the 1990s because the IRS had eased off enforcement under pressure from Congress, said Christopher Rizek, a lawyer at Caplin & Drysdale, a Washington-based law firm that specializes in tax matters.

Wealthy Individuals

“They spent about two years re-organizing themselves,” he said. “They were intimidated.”

By the mid-2000s more aggressive enforcement resumed.

Wealthy individuals who purchased POPS and other tax shelters were often identified by the IRS and Justice Department in probes of the accounting firms and law firms that sold them.

The uproar in Congress over whether the IRS tried to head off conservative groups from getting non-profit status could curb challenges to tax shelters again, Rizek said.

Tax lawyers are watching how the agency responds to “this month’s use as a pinata by Congress,” he said.
“They could be cowed again,” Rizek said. “We’ll see.”

The case is Vanadium Partners Fund LLC v. IRS, 9970-13, U.S. Tax Court (Washington).

To contact the reporter on this story: Andrew Zajac in Washington at azajac@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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Vanity Fair tries to link Arrington rape accusation to Silicon Valleys

Nov 1, 2013 … It claims that the scandal represents “the dark side of the Internet Age” … Maximillian Potter’s “Letter from Silicon Valley” in the December issue of Vanity Fair examines … And that was with a high profile VC firm to begin with.

http://www.zdnet.com/ vanity-fair-tries-to-link-arrington-rape-accusation-to-silicon-valley s-lack-of-women-in-tech-7000022702/ – View by Ixquick ProxyHighlight

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How the VC’s manipulated Afghanistan for Lithium HERE>>>

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BLOOMBERG:

Tom Steyer: The Wrath of a Green Billionaire
By Joshua Green April 25, 2013
The billionaire — with a jar of tar sand oil

Billionaires get frustrated by Washington ineptitude just like everybody else. The difference is that they can afford to do something about it. Tom Steyer, who founded the San Francisco-based hedge fund Farallon Capital Management and retired last year with an estimated $1.4 billion fortune, is one such fed-up billionaire. Steyer’s particular grievance is the lack of government action to combat global warming. “If you look at the 2012 campaign, climate change was like incest—something you couldn’t talk about in polite company,” he says. “With the current Congress, the chance of any significant energy or climate legislation that would move the ball forward is somewhere around nil—possibly lower.”

So Steyer, 55, a major Democratic contributor, quit Farallon to devote his time and much of his money to changing this reality. In doing so, he’s joined an emerging class of billionaires—including this magazine’s owner, Michael Bloomberg and Facebook (FB) co-founder Mark Zuckerberg—who have forsaken the traditional approach of working through the political parties and instead jumped directly into the fray, putting their reputations and fortunes behind a cause.

Some environmental activists are thrilled. “In a country that’s dominated by billionaires gaming the political system for their narrow self-interest, it’s pretty neat to see a player who’s in it for the common good,” says author and environmentalist Bill McKibben. “He’s not a greedhead.” Many Democrats, McKibben among them, view Steyer as a liberal analogue of the conservative Koch brothers, the billionaire owners of Koch Industries, whose lavish support of free-market causes and political ruthlessness loom large in the liberal imagination.
Steyer’s financial commitment is unquestioned. In 2010 he and his wife, philanthropist Kat Taylor, signed the “Giving Pledge” begun by Warren Buffett and Bill and Melinda Gates to persuade wealthy people to devote the majority of their fortunes to good causes. That same year he spent $5 million successfully defending California’s greenhouse gas emissions law against a ballot measure, heavily financed by oil companies, to weaken it. He spent an additional $35 million last year on an initiative to close a tax loophole that benefited out-of-state corporations. Voters approved the measure, which will raise $1 billion a year in new revenue for the state, in November. “He has made a difference in California,” says Representative Henry Waxman, the Los Angeles Democrat.

His aptitude for hardball politics is less certain. On March 18, Steyer, a vocal opponent of the proposed Keystone XL pipeline that would pump tar sands oil from Canada to the Gulf Coast, clumsily inserted himself into the Massachusetts Democratic primary race between Representatives Edward Markey and Stephen Lynch for the state’s open Senate seat. Channeling John Wayne, Steyer penned a bullying letter demanding that Lynch renounce his support for the pipeline “by high noon” a few days later or face the wrath of all the opposition Steyer and his checkbook could muster. Lynch’s campaign dismissed the stunt as “billionaires
issuing ultimatums.” The Boston Globe chastised Steyer for butting into a race in which both candidates had pledged to eschew PAC support. Markey probably doesn’t even need the support:

But after the searing defeat in Congress three years ago of legislation to cap carbon emissions, Steyer and many other Democrats preoccupied with climate change are convinced that only a smash-mouth, confrontational style of politics can save the planet. He subscribes to the analysis offered in a recent paper by Harvard sociologist Theda Skocpol that the loss derived from Democrats’ naive faith that their best chance at climate legislation was cooperating with polluters on a grand bargain negotiated by Washington power brokers. The strategy failed to account for Republicans’ radicalization and use of the filibuster. And because environmental groups had neglected to organize, no grassroots pressure materialized when the legislation stalled.

Steyer confidently presents himself as being in the vanguard of a hardheaded new approach. “The way politics works is by people winning and losing jobs—their own jobs,” he says. “Until people running for office believe it’s in their own interest, that it will make them popular with their constituents to stand up for good policy, it’s not going to be good politics.” For now, this approach entails rounding up a posse of environmental activists and making blustery threats to keep Democrats in line. Earlier this month, Steyer paid for an airplane to circle a Boston Red Sox game at Fenway Park trailing a banner that read, “Steve Lynch for Oil Evil Empire.”

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Team Obama Releases List of Campaign Bundlers…Corrupt Jon Corzine and Solyndra Goons Steve

Spinner/Steve Westly Top the List

February 1, 2012 by Scotty Starnes

What a list of corruption. Ex-Democrat Senator Jon Corzine is on the list. Corzine bankrupted MF Global and stole hundreds of billions from investors. Steve Spinner is an Obama bundler who pushed the Solyndra loan and Steve Westly has received billions for corporations he has ties to. Remember, Obama pretended to hate lobbyist as he issued waivers for lobbyists to work in his administration.

WASHINGTON (AP) — President Barack Obama’s re-election campaign identified its top fundraisers on Tuesday, including 61 people who each raised at least half a million dollars. Altogether, the more than 440 fundraisers collected at least $75 million to help Obama win a second term.

Among them are embattled former New Jersey Gov. Jon Corzine. Obama’s campaign and the Democratic National Committee late last year returned $70,000 in contributions from Corzine and his wife following questions about the collapse of MF Global, the financial firm Corzine ran.

…The list includes two fundraisers linked to Solyndra LLC, theCalifornia solar company that received a $528 million federal loan and then later declared bankruptcy, prompting a federal investigation. Steve Spinner, an Energy Department adviser, raised at least $500,000 and Steve Westly, a venture capitalist who was an unpaid adviser to the department, raised between $200,000 and $500,000.

…Though Obama rejects contributions from lobbyists, his top fundraisers include
individuals involved in the business of influencing government.

Michael Kempner, among those who raised more than $500,000, is president and CEO of MWW Group, a public relations firm with a large lobbying business. Kempner himself is not a registered lobbyist.

Sally Susman, another fundraiser in the $500,000-plus category, is executive vice president for policy, external affairs and communications at Pfizer Inc., a job that includes directing the pharmaceutical giant’s government relations operations.

Spinner and Westly are lobbyist as well. They bundled money for Obama then lobbied for money to be invested in corporations they have interest in.

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Obama releases list of top money ‘bundlers’
Associated Press
By JIM KUHNHENN and KEN THOMAS February 1, 2012 9:32 AM

WASHINGTON (AP) — President Barack Obama’s re-election campaign identified its top fundraisers on Tuesday, including 61 people who each raised at least half a million dollars. Altogether, the more than 440 fundraisers collected at least $75 million to help Obama win a second term.

Among them are embattled former New Jersey Gov. Jon Corzine. Obama’s campaign and the Democratic National Committee late last year returned $70,000 in contributions from Corzine and his wife following questions about the collapse of MF Global, the financial firm Corzine ran.

Corzine is no longer raising money for the re-election, campaign officials said.The campaign divided the list into four groups based on how much money donors raised:

$50,000-$100,000, $100,000-$200,000, $200,000 to $500,000 and those who raised more than $500,000 apiece.

The donors represent a broad network of contributors, many of them longtime Democratic Party stalwarts.

The list includes two fundraisers linked to Solyndra LLC, the California solar company that received a $528 million federal loan and then later declared bankruptcy, prompting a federal investigation. Steve Spinner, an Energy Department adviser, raised at least $500,000 and Steve Westly, a venture capitalist who was an unpaid adviser to the department, raised between $200,000 and $500,000.

The disclosure came as Obama headed back out on the money trail, speaking Tuesday night at two high-dollar fundraisers in the Washington area where donors paid $35,800 per ticket to see him. At an event at the posh St. Regis Hotel, the president told donors that Republicans have “the wrong vision for America,” though he didn’t mention any of his opponents by name or reference the voting under way in Florida, where polls were closing in the state’s GOP primary.

Obama said voters needed to know “that this is not an abstract ideological argument, that this is a practical concrete argument,” and that the election is about whether they’ll be able to find a good job with a living wage and get health care for their families. “They’ve got to feel that we are actively advocating on their behalf.”

Obama’s campaign ended the year with more than $81 million in the bank, but Republicans are gearing up in the race for the White House.

The Republican National Committee collected $27 million during the final three months of 2011, compared with $23 million by the DNC. In December, the RNC raised $11.6 million while the DNC collected $8.8 million.

Through the end of 2011, the RNC had $20 million in the bank and $13 million in debt, while the DNC held $12.5 million in cash on hand and $6.5 million in debt.

Though Obama rejects contributions from lobbyists, his top fundraisers include individuals involved in the business of influencing government.

Michael Kempner, among those who raised more than $500,000, is president and CEO of MWW Group, a public relations firm with a large lobbying business. Kempner himself is not a registered lobbyist.

Sally Susman, another fundraiser in the $500,000-plus category, is executive vice president for policy, external affairs and communications at Pfizer Inc., a job that includes directing the pharmaceutical giant’s government relations operations.

California figured most prominently on Obama’s roster of big money “bundlers.” Sixteen are from California and 13 are from New York.

Top fundraisers include movie producers Jeffrey Katzenberg and Harvey Weinstein, and Vogue editor-in-chief Anna Wintour. Actress Eva Longoria was in the second highest tier, bundling $200,000 to $500,000 for Obama’s re-election.

Associated Press writer Erica Werner contributed to this report.

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D- LAT, GH- WAPO, HJ-HuffPO, Surf Alliance- FGT,

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Trolling the illuminati!

According to all of these studies, and general consensus, people who drive Tesla’s are arrogant pricks.

According to all of the studies, and general consensus, about Silicon Valley Billionaires, they, too are arrogant pricks.

Arrogant Fraternity House prick boys are the most entitled, egotistical pseudo-macho people on Earth.

Ergo, they will defend their sports team, beer brand, stock portfolio and anything that questions their penis-size, to the death.

So, if you are trying to drain the illuminati’s bank accounts in order to achieve a political advantage, there is no greater gift than Tesla Motors.

By Elon Musk’s own published admission, Tesla was dead in 2008. It was only kept alive as The Walking Dead by Silicon Valley VC’s in order to get battery kickback deals and policy control.

Every time the Tesla stock ticker starts dropping like a rock, when real investors realize it is a scam, the Silicon Valley VC’s run out and buy a bunch of stock to make it look like Tesla has risen from the stock market dead in spite of the fires, recalls, management walk-outs, employee accidents, fraud charges, lawsuits and all of the other things that would kill any other company in the stock market. (Is that legal?)

That is called “pumping the stock“. Those are fake stock buys from Silicon Valley VC’s.

The only thing is, the more they pump, the poorer they get.

T. C. – BB
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Ha! In San Francisco they are rioting against Google’s buses, everybody hates the entitled freaks (“Hipsters”) from Silicon Valley and Silicon Valley has become the most un-cool thing on the planet because of all the personal data harvesting and that spy thing. As usual, Obama is 2 weeks behind in his news updates, he mentioned “Silicon Valley” in his press conference today as if that was a good thing. It is lucky he is firing most of his staff, that never told him what was really going on. Somebody better tell tell him that The Valley is a very negative brand item these days. No wonder Silicon Valley wants to succeed from California: Everybody hates them!

Dione-  H

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DY_illuminatiYou know those secret organizations that form conspiracy cartels to
control government and industry. Here are all of the members of one such
organization known, among the members, as “The Omni” (Or Illuminati-East- Coast). Research them, draw a line between the connections. See what you see:

  • Rockmark Corporation
  • Fedmark Corporation
  • EC Holdings, Inc.
  • ECW Investor Associates
  • Realrock I
  • Louis R. Benzak
  • John R.H. Blum
  • James R. Bronkema Trust
  • Vincent deP. Farrell, Jr.
  • Leslie H. Larsen
  • Bill F. Osborne
  • Portman Family Trust
  • William F. Pounds
  • David Rockefeller
  • DR & Descendants, L.L.C.
  • The Estate of Edna B. Salomon
  • Robert B. Salomon
  • Ralph B. Salomon
  • William G. Spears
  • George M. Topliff

GH-LAT

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Protesters Stop Apple And Google Buses – Business Insider

8 hours ago … Protesters in San Francisco have stopped a bus filled with Apple employees on their way to work. They’ve also stopped a Google bus in …

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Bus Vandalized as Protesters in S.F., Oakland Target Silicon Valley …

5 hours ago … Update 2 p.m.: Our local “Google bus” protests took a turn today as a total of … In San Francisco, a bus carrying Apple employees was blocked …

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Apple/Google Busses stopped by protesters in San Francisco – SlashGear

7 hours ago … After stopping a Google bus two weeks ago, a group of protesters from what appears to be the same organization has stopped a bus full of …

http://www.slashgear.com/ applegoogle-busses-stopped-by-protesters-in-sanfrancisco-20309571/ – View by Ixquick ProxyHighlight

Protesters swarm tech worker shuttle buses in Oakland, S.F. | Other …

4 hours ago … Chris Roberts/The S.F. Examiner; Protesters block an Apple shuttle bus … Apple, Google, Yahoo, Genentech or eBay – “they’re all the same to …

http://www.sfexaminer.com/ sanfrancisco/ protesters-swarm-tech-worker-shuttle-buses-in-oakland-sf/ Content?oid=2655001 – View by Ixquick ProxyHighlight

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How Silicon Valleys Tech Reign Will End – Slashdot

Jun 29, 2013 … And Silicon Valley isn’t like a city, it’s like a… … and a lot of talk about VC funding for “great ideas”, which are all just Yet Another Social …… It sucks. It’s not actually a city, it’s more like a long series of 80s era malls which have …

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Scaling Venture Capital? We suck. We can do better. | 500 Startups

Apr 6, 2012 … Because we SUCK at EXACTLY the thing we’re supposed to help … past 20+ years i’ve spent in Silicon Valley as an engineer, entrepreneur, …

http://www.500.co/2012/04/06/scaling-venture-capital/ – View by Ixquick ProxyHighlight

5 Reasons to Move Your Startup Out of Silicon Valley — Tech News …

Sep 10, 2008 … The weather sucks in some of these towns (not Tallahassee) so your … In the Valley, every VC has a portfolio company in each flavor – their …

http://www.gigaom.com/ 2008/ 09/ 10/ 5-reasons-to-move-your-startup-out-of-silicon-valley/ – View by Ixquick ProxyHighlight

Fred Wilson on why corporate VCs suck | PandoDaily

Jun 18, 2013 … And two of my favorite moments were about the venture capital business. … You’ re Lucky, Twice You’re Good: The Rebirth of Silicon Valley and …

http://www.pando.com/2013/06/18/fred-wilson-on-why-corporate-vcssuck/ – View by Ixquick ProxyHighlight

The Underbelly of Silicon Valley: VC “Finders” – peHUB

VC conference organizers should make their profits from sponsors, not from struggling … Last week, a Silicon Valley investor named Hugh Sloan III came across a …. securities – it would suck to pay for advice that leads one to break the law.

http://www.pehub.com/2010/02/the-underbelly-of-silicon-valleyvc-finders/ – View by Ixquick ProxyHighlight

Silicon Valley Could Use A Downturn Right About Now | TechCrunch

May 22, 2007 … Silicon Valley is paradise for geeks, and people flock here from all over the world … but for the most part there wasn’t a lot of venture capital moving into new web … Times are good, money is flowing, and Silicon Valley sucks.

http://www.techcrunch.com/ 2007/ 05/ 22/ silicon-valley-could-use-a-downturn-right-about-now/ – View by Ixquick ProxyHighlight

Most Venture Capital Firms Suck – Slate

May 7, 2012 … It’s well known that if you invest in actively managed stock funds, then the fund manager is going to make out a lot better than you will. Less well …

www.slate.com/ blogs/ moneybox/ 2012/ 05/ 07/ most_venture_capital_firms_suck.html – View by Ixquick ProxyHighlight

Dave McClure is ripping VCs again: They’re f***ing arrogant and …

Aug 22, 2012… B.C. today, the founder of Silicon Valleys 500 Startups dropped the F-bomb … He added that the returns for venture capital “absolutely suck.

http://www.geekwire.com/ 2012/ dave-mcclure-ripsvcs-fing-arrogant-stupid-aholes/ – View by Ixquick ProxyHighlight

Why does everything suck?: Arrington, Race, and Silicon Valley

Oct 28, 2011 … I spent this summer in Silicon Valley as part of the NewMe Accelerator. … To be clear, I am not saying any VC says at a partner meeting, “you …

www.whydoeseverythingsuck.com/ 2011/ 10/ arrington-race-and-silicon-valley-i.html – View by Ixquick ProxyHighlight

How We Ruined Silicon Valley | Motherboard

Long an oasis of innovation and meritocracy, Silicon Valley has often represented all that is pure in capitalism, a place where guys dare to … If you were a good VC you could make $100 million. … It’s not like anybody is doing evil or bad.

motherboard.vice.com/ blog/ facebook-marks-the-end-of-silicon-valley-as-we-know-it – View by Ixquick ProxyHighlight

Sift Science Funded to ‘Fight Evil on the Internet’ – Venture Capital …

Mar 19, 2013 … Venture Capital Dispatch HOME PAGE » …. Featuring the VentureWire reporting team in the Silicon Valley, New York, Boston and Shanghai …

blogs.wsj.com/ venturecapital/ 2013/ 03/ 19/ sift-science-funded-to-fight-evil-on-the-internet/ – View by Ixquick ProxyHighlight

Rude VC: Copying Silicon Valley – Rude Baguette

Mar 5, 2013 … For a more in-depth review, A History of Silicon Valley by Piero Scaru. … the emergence of Silicon Valley, in large part by trying to do no evil.

http://www.rudebaguette.com/2013/03/05/rude-vc-copying-silicon-valley/ – View by Ixquick ProxyHighlight

Michael Arrington, Jenn Allen, and the Dark Side of the Information …

Dec 1, 2013 … Speakers are a Who’s Who of Silicon Valley and in recent years … first female engineer, and Ben Horowitz, co-founder of the V.C. leviathan …

http://www.vanityfair.com/ business/ 2013/ 12/ michael-arrington-jenn-allen-relationship – View by Ixquick ProxyHighlight

Silicon Valley should wake up to clawback culture — Tech News …

Jun 28, 2011 … Silicon Valley should wake up to clawback culture … the culture of Silicon Valley venture capital and the clubby world of private equity: ….. conclusion that they are , by their very nature, evil or intended to cheat shareholders.

http://www.gigaom.com/ 2011/ 06/ 28/ silicon-valleyshould-wake-up-to-clawback-culture/ – View by Ixquick ProxyHighlight

John Doerr – Wikipedia, the free encyclopedia

His success in venture capital has garnered national attention; he has been and is … Doerr is a high profile supporter of the Democratic Party in Silicon Valley.

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Welcome to the (Don’t Be) Evil Empire | Common Dreams

Jun 25, 2013 … The criticism of Silicon Valley is long overdue and some of the … Google, the company with the motto “Don’t be evil,” is rapidly becoming an empire. …. is extremely unequally distributed, and current venture capital is going …

https://www.commondreams.org/view/2013/06/25-3 – View by Ixquick ProxyHighlight

The Dark Side of Silicon Valley – Center for Computer Research in …

And some of the industry’s most prominent venture capitalists, the financiers of the high- … This is a series about the dark side of the Silicon Valley miracle.

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Down and out in Silicon Valley: The dark side of easy VC access …

Sep 21, 2011 … Down and out in Silicon Valley: The dark side of easy VC access … The Valley is the tech centre of the Universe and you’re unlucky if you’re not …

http://www.ventureburn.com/ 2011/ 09/ down-and-out-in-silicon-valley-the-darkside-of-easy-vc-access/ – View by Ixquick ProxyHighlight

WATCH: If Nikola Tesla Pitched Silicon Valley VCs | Inc.com

May 31, 2013 … WATCH: If Nikola Tesla Pitched Silicon Valley VCs BY Mark Suster …. two-time entrepreneur who has gone to “the dark side” of venture capital.

http://www.inc.com/ mark-suster/ if-nicola-tesla-pitched-silicon-valleyvc.html – View by Ixquick ProxyHighlight

Silicon Valley is no meritocracy – Vivek Wadhwa – The Kernel

Dec 19, 2011 … I learned that virtually all of Silicon Valleys venture capital firms are …. These are blunt comments, and exemplify the dark side of Silicon Valley.

http://www.kernelmag.com/ features/ essay/ 160/ silicon-valley-is-no-meritocracy/ – View by Ixquick ProxyHighlight

The dark side of VC positivity | The Venture Company

Dec 8, 2010 … Only 45 of 790 U.S. VCs make any consistent money for LPs (according to a reputable Silicon Valley money manager). So, Venture as a …

http://www.venturecompany.com/blog/2010/12/the-darkside-of-vc-positivity/ – View by Ixquick ProxyHighlight

The Grassy Road: The dark side of Silicon Valley

Jun 18, 2012 … Silicon Valley is on a roll right now. The relatively low levels of capital needed to start a software company has meant that start up incubators …

pennyherscher.blogspot.com/2012/06/darkside-of-silicon-valley.html – View by Ixquick ProxyHighlight

Are Silicon Valley Angel Investors Colluding Over Deals? | Techdirt

Sep 22, 2010 … While there are plenty more angels in Silicon Valley than just 15, it is … Every industry has a dark side – most of us can’t see it and therefore, we forget its there. … VC investors would be wise to not attract the government with …

http://www.techdirt.com/ articles/ 20100921/ 18574611100/ are-silicon-valley-angel-investors-colluding-over-deals.shtml – View by Ixquick ProxyHighlight

Modern Luxury | San Francisco Magazine | Dark side of the boom

Feb 17, 2012 … E.B. Boyd reports on how his death has touched a nerve in Silicon Valley—and forced one of its biggest secrets out in the open. E.B. Boyd …

http://www.modernluxury.com/san-francisco/story/darkside-of-the-boom – View by Ixquick ProxyHighlight

How Scientists and Engineers Got It Right, and VCs Got It Wrong …

Jul 25, 2011 … ESL, the first company I worked for in Silicon Valley, was founded by a … however, the dark side to the current startup environment in the bay …

www.steveblank.com/ 2011/ 07/ 25/ how-scientists-and-engineers-got-it-right-and-vc%E2%80%99s-got-it-wro ng/ – View by Ixquick ProxyHighlight

A Tale From The Dark Side Of Silicon Valley PowerAgent was …

Apr 13, 1998 … The list of investors included venture capital firms Information … Today Sundby, 45, lives on Silicon Valleys dark side–a place where there are …

money.cnn.com/magazines/fortune/fortune_archive/1998/04/13/240866/ – View by Ixquick ProxyHighlight

Silicon Valley: What’s the dark side of Silicon Valley? – Quora

I’m talking about the stuff you don’t read on TechCrunch. … It is amazingly difficult to start/have a family if you make “normal” salaries here (you …

http://www.quora.com/Silicon-Valley/Whats-the-darkside-of-Silicon-ValleyView by Ixquick ProxyHighlight

DOUBLE-CROSSED / Silicon Valley entrepreneurs say they have …

Nov 17, 1999 … The power of Silicon Valleys top venture capitalists is rivaled only by the … But the High-tech miracle has a dark side: untold stories of ruined …

www.sfgate.com/ bayarea/ article/ DOUBLE-CROSSED-Silicon-Valley-entrepreneurssay-2896276.php – View by Ixquick ProxyHighlight

The Arrogant VC: Why VCs are disliked by entrepreneurs – Venture …

Dec 27, 2009 … And yes, I also plan on writing a feature about the “good side” soon… … on the VC side who have behaved in a rude and disrespectful manner“. … Continued in Part 2 with unwanted advice, arrogance, and the dark side of the force… …. you realize that Entrepreneurs in Si

http://www.venturehacks.com/articles/arrogant-vcView by Ixquick ProxyHighlight

Oil barons and tech hipsters share a dark side. – Slate

Jan 7, 2013 … Cozy relationships are common in Silicon Valley too. Marc Andreessen, whose venture capital firm routinely sells smaller companies to tech …

www.slate.com/ blogs/ breakingviews/ 2013/ 01/ 07/ oil_barons_and_tech_hipsters_share_a_dark_side.html – View by Ixquick ProxyHighlight

You’d Better Shop Around: Doing Due Diligence on Your VC

Aug 2, 2011… about the dark side of the venture world; stories of VCs who weren’t … VC partner doesn’t have an obvious bit of Silicon Valley pedigree?

http://www.xconomy.com/ san-francisco/ 2011/ 08/ 02/ youd-better-shop-around-doing-due-diligence-on-your-vc/ – View by Ixquick ProxyHighlight

Vulture Capital: Mark Coggins: 9781460979471: Amazon.com: Books

A trip through the dark satanic mills of venture capital with Chandler or Hammett as … believable story about the dark side of Silicon Valleys start-up community.

http://www.amazon.com/Vulture-Capital-Mark-Coggins/dp/1460979478 – View by Ixquick ProxyHighlight

With friends like these … Tom Hodgkinson on the politics of the …

Jan 13, 2008 … Facebook is a well-funded project, and the people behind the funding, a group of Silicon Valley venture capitalists, have a clearly thought out …

http://www.theguardian.com/technology/2008/jan/14/facebookView by Ixquick ProxyHighlight

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The Billionaire illuminati Front Groups

If the group has the words: “Grassroots”, “Citizens”, “Taxpayers”, “Occupy” or other such warm/cozy buzzwords in it’s title assume, that it may be a pretend front group for a billionaire, a corporation or a union. in the last 20 years, according to state and federal campaign disclosures: 98.2% of all such campaign groups were paid for by just a handful of men on behalf of their special interests. Look deeper, check the SUNSHINE sites and know what is what. Don’t get suckered by, either left or right wing facades. They apply to ALL parties. Do your research before you sign up, give money, phone tree or march for one or the other.

Koch Industries: Secretly Funding the Climate Denial Machine …

Billionaire oilman David Koch used to joke that Koch Industries was “the biggest … Koch Front Groups Attack RGGI—The Regional Greenhouse Gas Initiative …

http://www.greenpeace.org/ usa/ en/ campaigns/ global-warming-and-energy/ polluterwatch/ koch-industries/ View by Ixquick ProxyHighlight

Enron billionaire expands craven plot to abuse workers – Salon.com

Oct 7, 2013 … A billionaire‘s scheme to loot public workers’ pensions now includes a shadowy front group — and brand-new target.

http://www.salon.com/ 2013/ 10/ 07/ enron_billionaire_expands_craven_plot_to_abuse_workers/ View by Ixquick ProxyHighlight

Political activities of the Koch brothers – Wikipedia, the free …

They actively fund and support organizations that contribute significantly to ….. a huge network of foundations, think tanks, and political front groups. Indeed … ” Covert Operations: The billionaire brothers who are waging a war against Obama .”.

https://en.wikipedia.org/ wiki/ Political_activities_of_the_Koch_brothersView by Ixquick ProxyHighlight

Americans for Prosperity – SourceWatch

Americans for Prosperity created an offshoot front group called Patients United Now, …. According to a 2010 article on Koch Industries and the billionaire Koch …

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Brendan DeMelle: Study Confirms Tea Party Was Created by Big …

Feb 11, 2013 … A new academic study confirms that front groups with longstanding ties to the tobacco industry and the billionaire Koch brothers planned the …

http://www.huffingtonpost.com/ brendan-demelle/ study-confirms-tea-party-_b_2663125.htmlView by Ixquick ProxyHighlight

The Billionaires Behind Newt’s ‘American Solutions For Winning The …

Jul 29, 2008 … The same old men that propelled George W. Bush into office in 2000 and 2004 are behind Newt Gingrich’s multimillion-dollar front group, …

http://www.thinkprogress.org/ climate/ 2008/ 07/ 29/ 174099/ newt-aswf-billionaires/ View by Ixquick ProxyHighlight

The Libertarian Billionaire Agenda Propelling the Tea Party Monster …

Oct 3, 2013 … The small handful of oil and Wall Street groups behind the Tea Party, groups like FreedomWorks and Americans for Prosperity, were all front …

http://www.alternet.org/ tea-party-and-right/ libertarian-billionaire-agenda-propelling-tea-party-monster-has-shut- downView by Ixquick ProxyHighlight

empathyeducates – Exposed: The Billionaire-Backed Group Strong …

Another backer is billionaire John Arnold, a former Enron trader who ….. Why would Mary do the bidding of a corporate front group, pouring her energy and time …

http://www.empathyeducates.org/ exposed-the-billionaire-backed-group-strong-arming-parents-into-destr oying-their-kids-public-schools/ View by Ixquick ProxyHighlight

American Task Force on Palestine finds funding from anti …

Nov 27, 2013 … The fairly recent establishment of the pro-Israel front group, Scholars for Peace in the Middle East (SPME) was also made possibly by …

http://www.mondoweiss.net/2013/11/palestinian-billionaire-repressive.htmlView by Ixquick ProxyHighlight

George Soros – Discover the Networks

Multi-billionaire funder of leftwing causes and groups; Founder of the Open …… “ to justify repressive measures” on the home front while “establish[ing] a secure …

http://www.discoverthenetworks.org/individualProfile.asp?indid=977View by Ixquick ProxyHighlight

“Fix the Debt” Shows Its True, Billionaire-Funded, Anti-Tax Colors

Dec 3, 2012 … Fix the Debt has a very clear position on tax rates for millionaires, billionaires, and corporations, right there in the group’s “Core Principles” …

http://www.ourfuture.org/ 20121203/ fix-the-debt-finally-shows-its-true-billionaire-funded-anti-tax-color sView by Ixquick ProxyHighlight
Articles from VCR:

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THE EXPOSE ON “THE SUMMIT ON THE FUTURE OF EXPONENTIAL TECHNOLOGIES”.

The Silicon Valley Tech-illuminati hold an event called the “SUMMIT ON THE FUTURE OF EXPONENTIAL TECHNOLOGIES” organized by The Singularity University (Which is dedicated to merging people with machines and creating SkyNet, or something like it)(Notice that Google just bought a humanoid robotics company as they infest the entire internet so the actual Terminators must be only a few years away.)

At SUMMIT ON THE FUTURE OF EXPONENTIAL TECHNOLOGIES they discuss “3D printing living hookers on demand”. Imagine, you are horny and you can print up Marilyn Monroe or Angelina Jolie for pleasure and, later, “reprocess” your pseudo-flesh pleasure-lifeform into another character. Silicon Valley VC’s love disposable people. Ask any H1B engineer from India. They like to get them in, get the code and shoot them back to Bhopal so the VC’s don’t have to pay them any stock. Already one of the leading employers of escorts and prostitutes in the U.S., disposable 3D printed sex people couldn’t be more perfect for Silicon Valley.

They discuss the economics of “In-Vitro Hamburgers“. They claim to have already made, and eaten In-Vitro Hamburgers. Short on cash?, give birth to In-Vitro hamburger patties and sell them to McDonalds to supplement your income. Great! So now the Silicon Valley VC’s really can eat their young.

While they were at it, they also arranged to have Coca Cola control our last natural
resource: Drinking water. The Singularity people made a deal so only Coca Cola can get you fresh water if you are dying from thirst. Evil?

People are actually building these things. The Illuminati pay for this crap. How out of touch with reality can these billionaires be?

Here the rich and powerful fraternize with their anointed “inventors”. These “inventors” are ivy league college chums that they fund in order to control markets. Pitched as, the “next generation of technological break-through”, these backers tend to support things that Austin Powers wants more than the average person needs. Closely aligned with the audaciously self-promoting yuppie TED Talk culture, these gatherings are college parties for mutual admiration indulgences.

At least with TED Talks you can go online and watch TED Talks to research who the
arrogant self-obsessed Silicon Valley hipsters are. With the SUMMIT ON THE FUTURE OF EXPONENTIAL TECHNOLOGIES, it is a bit more stealthy but NPR snuck in and got the goods.

Famous scientist Craig Vettner says Singularity hype is all: “Bu*lSh*t” in an NPR
interview. He, and most credible engineers find that this is all pump and dump stock
shilling.

AT- University of Los Angeles
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AI or BS??

http://ask.metafilter.com/162790/AI-or-BS
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See this link for more:

https://www.growvc.com/openTalks/publicBoard/22779

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See this link for other thoughts:

http://37signals.com/svn/posts/1927-the-next-generation-bends-over

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Here is why they tried to “KILL” Micheal Arrington, Martin Eberhard, Snowden, Assange and the rest:

So A Blogger Walks Into A Bar…
Michael Arrington
Tuesday, September 21st, 2010

Yesterday I 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,” I was told.

So I did what any self respecting blogger would do – I drove over to Bin 38, parked my car and walked in.

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.

DY_illuminatiI certainly didn’t think anything was amiss and I 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 instead it went something like this:

Me: Hey!
Person who was talking: oh, oh no.
Me: Hi. I heard you guys were here and I wanted to stop by and say hi.
Them: dead silence.
Me: so….
Them: Deafening silence.
Me: This is usually where you guys say “sit down, have a drink.”
Them: not one sound
Me: This is awkward. I guess I’ll be leaving now.

I’ve never seen a more guilty looking group of people. But that alone isn’t that big of a deal. Lively conversations often die quickly when I arrive, and I’ve learned not to take it personally. But I did sniff around a little afterwards, and have spoken to three people who were at that meeting. And that’s where things got interesting.

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. Early on it was mostly to complain about a variety of things. But the conversation has evolved to the point where these super angels are actually colluding (and I don’t use that word lightly) to solve a number of problems, say multiple sources who are part of the group and were at the dinner. According to these souces, the ongoing agenda includes:

  • Complaints about Y Combinator’s growing power, and how to counteract competitiveness in Y Combinator deals.
  • Complaints about rising deal valuations and they can act as a group to reduce those valuations.
  • How the group can act together to keep traditional venture capitalists out of deals entirely
  • How the group can act together to keep out new angel investors invading the market and driving up valuations.
  • 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.

At least two people attending were extremely uneasy about the meetings, and have said that they are only there to gather information, not participate.

So 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.

I’m not going to say who was at the meeting since at least a couple of the attendees are saying they were extremely uncomfortable with the direction the conversation was going. But like I said, it included just about every major angel investor in Silicon Valley.

On a side note, this is a difficult post to write, because I call nearly every person in that room a friend. But these actions are so completely inappropriate it has to be called out.
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Not sure what your sources are, but courts have ruled that parallel action can be sufficient evidence of conspiracy under Section 2 of the Sherman Act. See e.g. American Tobacco v. United States (1946), available here:

http://supreme.vlex.com/vid/american-tobacco-v-united-states…

The Supreme Court wrote:

“[The conspiracy’s] existence was established, not through the presentation of a formal written agreement, but through the evidence of widespread and effective conduct on the part of petitioners in relation to their existing or potential competitors.”

If I remember correctly from my anti-trust class last year, the American Tobacco precedent still stands. You don’t need written or audio evidence to get a conviction; anti-competitive behavior in the marketplace is sufficient.

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dandelany 774 days ago | link

Interesting questions… IANAL, but I imagine they’re colluding to bring down the valuations of startups, therefore essentially fixing the “price” of their money, to be paid for in startup equity.

If I, and others, say your company is worth a million dollars, then I’m fixing the price of my $500,000 at 50% of your company.

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brendonjason 774 days ago | link

IANAL(E), but this scenario would seem to be more of a concern if startups in Silicon valley got together over dinner to deny deals that didn’t offer similar terms and prices in dollars for securities of all startups represented at said dinner simultaneously.

As for angels fixing the “price of their money” I don’t understand how antitrust applies to this anymore than it would to, say, how LIBOR is determined.

If antitrust applies to colluding on the dollar amount to be paid OUT instead of price asked for money coming in, then if I start a boycott of something (colluding to pay $0) am I guilty of violating antitrust laws?

As I understand it (not much, I admit), antitrust applies to goods and services, not cost of money. If antitrust applied to cost of money, the Federal Reserve would not exist since it’s basically an extension of the member banks that make up its institutional board of directors (not board of governers). All they do is get together and fix the price of money to be printed and lent out to member banks.

Also, this whole “I stumbled in on a secret meeting of powerful men conspiring to start a revolution” thing is somewhat suspect; throughout history this gambit, if it actually happened that way, is usually either desperate grab at 15 minutes of fame (which seems unlikely given Michael’s popularity), an attempt to gain instant credibility on some esoteric but useful new subject (“I was the only outsider privvy to what happened there, so you can trust me”) or, unfortunately, a cynical move feigned by the men in the room to inspire hasty and possibly faulty reactionary stances by the supposed target of their “envy”.

I could be wrong though. I just can’t believe guys who are careful enough to get to such a position in life would all simultaneously get so careless. On the same day. In the same place.

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polynomial 773 days ago | link

> if I start a boycott of something (colluding to pay $0)

http://j.mp/dividedby0

(Unless of course you actually get them to give it to you for nothing, which is generally not the point of a boycott…)

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jeromec 774 days ago | link

Think of the stock market. That’s certainly a marketplace. It’s made up of investors seeking to earn a return on their money by investing in companies. Think of the illegalities involved in collusion to manipulate the stock market. Now think of Silicon Valley as a less formal/regulated stock market…

With Groupon nobody is asked to not buy or otherwise participate in the market unless done through Groupon.

Instead, it’s like a grocery store co-op; members pool their money to get more buying power. This doesn’t mean they agree to refrain from shopping elsewhere, as that would be collusion/conspiring to produce a market effect.

IANAL

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brendonjason 774 days ago | link

If I have an investing club and we come to define an investment approach, say, what stocks we like and what we think they should be valued at, are we colluding to price fix the market? If I think a company is over priced and I am in charge of executing trades for my investing club, whose members unanimously agreed not to buy the stock in question until it fell down say, $20 more in price – are we colluding? Yes. Colluding to price fix? No. We’re simply colluding not to participate in the buy side. That may or may not lead to sellers slowly changing their asking price. But that’s a two-way street. I don’t see the illegality according to anti-trust. Now if every major instututional house/hedge/mutual/pension fund that owned that stock got together and colluded to refuse to SELL us any stock until we agreed to their higher price, that I understand is illegal. They are fixing the price literally. But I don’t see how us refusing to participate in a transaction on the buy side is illegal whether we have 5 members or 5 million.

Saying that the angels are colluding to price fix buys into Michael’s assertion that “together, the men in that room account for nearly 100% of all angel deals”. That means that their “deals” are the commodity in question, and they are free to do as they wish. If it’s their money, then it’s hard to make the claim that their money is the market. There’s certainly more money in the world than theirs.

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blueben 774 days ago | link

“Look, you and I both know your company is worth $50 million. But I only want to pay $10 million, and I’ve already worked out a deal with my competitors so they won’t bid any more than that either. We own the market for investment, so you can take it or your company can die for lack of funding.”

You don’t see a problem with this kind of artificial market manipulation? This is no longer a market; it short circuits true capitalism and only serves to siphon gains from the seller (in this case, the company’s founders) to the buyer, who will turn around and effectively try to resell (or otherwise exit) the company for profit.

Everyone seems to be convinced that price fixing only applies to sellers. That’s wrong. It firmly applies to both selling and buying. It’s fundamentally about market manipulation; taking steps to undermine the economy of the system for direct personal gain. That kind of behavior destroys wealth and erodes confidence in the marketplace.

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aufreak3 774 days ago | link

I’m ignorant enough to have the same question in my mind.

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SkyMarshal 774 days ago | link

Grellas, what’s your take on this Quora comment? In a nutshell, it’s not illegal for collusion on the buy side, only the sell side:

Tarun Nimmagadda, Mutual Mobile Co-Founder, COO

http://www.quora.com/Who-are-the-Super-Angels-that-Michael-A…

“The article was a fun read, but it is a false claim that this is illegal. Collusion, price fixing, and dividing markets is only illegal on the selling side. Think about how people and groups are able to band together for purchasing power and special treatment when buying goods/services. Its not illegal.

Worth noting thought that if this price manipulation happened in relation to a company with over a 100 investors, SEC regulations would begin to apply and this behavior would be illegal”

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grellas 774 days ago | link

That comment was made out of ignorance. Antitrust laws are by no means limited to sellers only.

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SkyMarshal 774 days ago | link

Interesting, thanks.

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Alex3917 774 days ago | link

“Collusion, price fixing, and dividing markets is only illegal on the selling side.”

IANAL, but didn’t Standard Oil got broken up largely for being a monopsony? In fact the first two complaints from the DoJ were about sell-side issues:

“Rebates, preferences, and other discriminatory practices in favor of the combination by railroad companies; restraint and monopolization by control of pipe lines, and unfair practices against competing pipe lines; contracts with competitors in restraint of trade; unfair methods of competition, such as local price cutting at the points where necessary to suppress competition; [and] espionage of the business of competitors, the operation of bogus independent companies, and payment of rebates on oil, with the like intent.”

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invisible 774 days ago | link

I know this was pointed at grellas, but I think this is a misunderstanding when we look at price fixing and collusion. The illegality of collusion is secretly forming agreements to benefit competitors at the expense of other parties. Words like defraud can succinctly help you understand whether it is illegal or not when looking at these agreements.

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dctoedt 774 days ago | link

The Wikipedia summary of Section 1 of the Sherman Act is a decent read:

http://en.wikipedia.org/wiki/Sherman_Antitrust_Act#Violation…

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jon_dahl 774 days ago | link

Grellas, would there have to be evidence that the participants were acting anti-competitively, or is being in the room enough? Arrington says that a few of the folks there were uncomfortable with what was going on, and were maybe there just to see what was happening.

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grellas 774 days ago | link

Assuming the meeting had an illegal purpose (which is a major assumption at this point), one might infer that anyone present was complicit in that illegal purpose. In my view, that by itself would not normally be enough to subject someone to liability, especially if the participant disclaims affiliation with the group and thereafter does not act in concert with it.

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guelo 774 days ago | link

Does it matter if the participants have monopoly power over the market? I have a hard time believing Arrington’s claim that “ten or so” angels control “nearly 100% of early stage startup deals in Silicon Valley”. If they control lets say only 50% of this market would it still be illegal collusion?

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grellas 774 days ago | link

It is not required that the participants have monopoly power for them to transgress the law on this point. I agree with you that the “nearly 100% of the early stage deals in Silicon Valley” statement is wildly overstated but this should not affect the fundamental legal analysis here.

—–tc 774 days ago | link

Congratulations to PG & company. When I first met Paul years ago, he was musing about spam filters and the finer points of a well-designed lisp. Now he apparently has the top 10 angels in Silicon Valley running scared of him.

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jeromec 774 days ago | link

The interesting thing is unlike that group of Angels apparently in the bar PG’s interests are less about helping himself, and more about helping entrepreneurs. From an essay by PG entitled “Why YC”: The real reason we started Y Combinator is one probably only a hacker would understand. We did it because it seems such a great hack. There are thousands of smart people who could start companies and don’t, and with a relatively small amount of force applied at just the right place, we can spring on the world a stream of new startups that might otherwise not have existed.

In a way this is virtuous, because I think startups are a good thing. But really what motivates us is the completely amoral desire that would motivate any hacker who looked at some complex device and realized that with a tiny tweak he could make it run more efficiently. In this case, the device is the world’s economy, which fortunately happens to be open source.

http://paulgraham.com/whyyc.html

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wensing 774 days ago | link

YC’s greatest hack is identifying founder material based on technical rather than social proof (the YC app asks for an example of the coolest thing you’ve ever built, not an example of a cool person that thinks you are cool). This hack is possible thanks to a judges panel full of real nerds. How many super angels or VC’s can claim to have the same?

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gruseom 774 days ago | link

I agree that YC are able to identify great hackers and great founders more easily because they are these things themselves. What’s little recognized is how big a difference this is between YC and the other YC-like funds.

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wensing 774 days ago | link

Yes. I had a colleague apply for TechStars and her takeaway from the interview was “he was really focused on where the business was.” Doesn’t seem in line with what I’ve heard about YC’s primary interest (it’s not the business model).

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gruseom 774 days ago | link

It seems kind of obvious that most successful startups don’t succeed via the business model they started with. And that great founders can change business models more easily than great business models can change founders. Thesethings are so obvious that they’re cliches, in fact, but that doesn’t mean that they’re common practice.

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qq66 774 days ago | link

I don’t think anybody’s stated interests should be taken as an indicator of their true interests. In this case,with PG, I do believe that his stated intentions are sincere. But there is often so little correlation between actual and stated intentions, that I don’t take any such statement at face value.

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jeromec 774 days ago | link

I don’t think anybody’s stated interests should be taken as an indicator of their true interests. I agree. (actually I’d replace “taken as an indicator” with “taken as an absolute indicator”) In this case, with PG, I do believe that his stated intentions are sincere. I agree.

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mhendrick 774 days ago | link

Correct me if I’m wrong, but isn’t it likely that the angels involved also make up a strong percentage of the people who invest on Demo Day in post-YC companies? How can it be a “PG vs Angels” situation when the parties involved are likely some of YC’s portfolio companies biggest “supporters”?

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brc 774 days ago | link

One of the outputs from the YC process is better educated founders who have a lot more guidance in negotiating through a deal Even if the deal flow was exactly the same, just having the founders suffering less from information assymetry would be a stone in the shoe of the Angels. Think of it this way : if YC did all the same things, but also turned founders into being Angel patsies at dealtime, do you think they would be upset about it? I would guess it’s the information about how to negotiate, and what a good deal looks like is the problem. I’m sure they love the concept of demo-day to go deal shopping, but would prefer it if the products didn’t talk back.

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MediaSquirrel 774 days ago | link

YC is the seller, angels at Demo Day are the buyers. Just cuz you work with someone closely doesn’t mean you won’t or can’t try to screw them.

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redrobot5050 774 days ago | link

Yeah. I mean, look at the JooJoo/CrunchPad Debacle. According the Mike A., that’s exactly what happened.

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mhendrick 774 days ago | link

Agreed. It’s possible they got a bit overconfident in their respective positions because of the easy access to so many well-vetted companies.

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jeromec 774 days ago | link

Correct me if I’m wrong, but isn’t it likely that the angels involved also make up a strong percentage of the people who invest on Demo Day in post-YC companies?

Yes, I believe so.

How can it be a “PG vs Angels” situation when the parties involved are likely some of YC’s portfolio companies biggest “supporters”? That question might be better put to those Angels in the bar…

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mhendrick 774 days ago | link

I’m not defending the angels involved by any means; I actually think it’s a great thing that this has been exposed if it is indeed what’s been going on. The easy access to YC companies may in fact be what emboldened them to act in this manner in the first place. Once this all plays out, I think it’s safe to assume that at least a few of the angels in question are going to have to answer for their actions. Should be interesting to hear what they have to say.

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brendonjason 774 days ago | link

Yes. They are running scared of the growing threat of the Ylluminati. But since they have 100% of all the deals, they also seem to co-invest(?!?).

These anxious (yet all-powerful) group of angels and this unstoppable new seed-stage prominence. They form a closed loop. A loop closed off to venture capitalists and angels not at that meeting … which is basically everybody.

Except Michael. He got away with his life intact and lived to warn us all. Actually, I don’t know what’s scarier – the supposed collusion or the subtle dread that Y Combinator is supposed to evoke in my mind as I ponder the possibility of this event being true. If it is true – maybe we should be side with these poor angels and help them before it’s too late. To paraphrase Woodrow Wilson, “Since I entered (angel investing), I have chiefly had (angel investor’s) views confided to me privately. Some of the biggest men in the (Valley), in the Field of (IT) and (Venture Capital), are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they better not speak above their breath when they speak in condemnation of it.” That something … is Y Combinator.

Um … no. The dark side doesn’t suit you, Y Combinator.

Please stop.

I’m sorry. Maybe I’ve had too many beers tonight. But this is the kind of scenario that only comes out of the mind of a silicon valley PR firm.

(please don’t downvote me too much … I’d like to get above 100 karma points just once for a change! Noooo!)

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limist 774 days ago | link

I upvoted you just for the historical reference.

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mixmax 774 days ago | link

So a blogger gets a tip from a source, knows the people involved, acts on it and smells a rat. He sticks around and talks to a few people he knows, makes a few calls and gets a breaking story. Sounds to me like bloggers are the new journalists and that traditional media is in big big trouble.

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sachinag 774 days ago | link

Felix Salmon does this, and he’s a blogger working for Reuters. Dan Primack does this, and he’s a blogger working for Fortune. It’s not about old/new media – it’s about hustle.

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Alex3917 774 days ago | link

Read Manufacturing Consent or any of the books that have been written about the MSM since then. It’s very much about old media verse new media.

If this were the NYT they’d probably tell Arrington he couldn’t run the story because it’d interfere with either their ad sales or else their access to sources. For example, just look at how/why they covered up their knowledge of the warrantless wiretapping until after Bush got reelected.

Whereas with Arrington there’s no one to tell him he can’t do it because it’s his blog, and because he’s not part of some mega corporation the chances of a story like this killing the revenue of some part of his empire are infinitely lower.

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metamemetics 774 days ago | link

>Sounds to me like bloggers are the new journalists Journalism used to be considered the fourth branch of government, keeping the other branches and largeinstitutions in check. Blogs are the startups of the journalism world. As America moves from bureaucratic capitalism with large institutions to entrepreneurial capitalism with many small firms & independent players, the responsibility to call out unethical behavior is transferred from news companies to the individual.

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vaksel 774 days ago | link

a breaking story would name names…him not naming names just means he can use this as a hammer to get better terms for Techcrunch(either I get exclusive to every deal you guys do…or your names will be posted)

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metamemetics 774 days ago | link

I would argue it’s more ethical to discourage and prevent crime from ever happening in the first place. Seeking satisfaction from “catching the bad guy” (naming names) is to setup a market dependent on the need for new crimes.

Arrington did the right thing. It’s not about whether he caught a criminal, it’s about whether he prevented someone from becoming one.

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eavc 773 days ago | link

Someone (maybe everyone) in that group knew what they were doing to be wrong. I doubt that they will abandon their ethical choice; they’ll find smarter ways to do what they’d intended all along.

One thing that might work is if someone in the group has damning correspondence, everyone will panic and promise to “never talk about that summer again,” genuinely preventing future problems.

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jon_dahl 774 days ago | link

Maybe. This approach shows some integrity too, though. Not everything has to turn into a scandal (at least if inappropriate behavior stops quickly). Call me soft on crime.

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mattmaroon 774 days ago | link

Him not naming names means that people will continue to give him information in the future. He’d be shooting himself in the foot by naming a source that requested anonymity.

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SkyMarshal 774 days ago | link

There’s an interesting conundrum there too. He can’t name names without either omitting (and hence identifying) his source/s, or including (and inditing) them.

Either way he loses that/those source/s for future stories. He did the only thing he could do, besides staying silent. If it happened to be the right thing as well, so much the better.

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drusenko 774 days ago | link

unlikely. business in the valley is not done by extortion. more likely is that he doesn’t want anyone to get in trouble, he’s just putting them on notice.

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jnoller 774 days ago | link

I do hope he’s wrong, or that this a mistake of some sort. The rise of Angel investors has seen a lot of ideas and entrepreneurs get needed money when they might not have under the traditional VC model.

Something like this, if true, will cause the government to step in, and probably regulate and change things for the worse for a great many people. It won’t just hurt these few super angels. It will take everyone with it.

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j_baker 774 days ago | link

To be fair, this is Michael Arrington. He’s not above sensationalism to get a few extra clicks.

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mattmaroon 774 days ago | link

This goes well beyond sensationalism. I’m inclined to believe him for three reasons:

1. Mike’s not known for boldly lying. He might publish rumors that Facebook is building a phone too liberally, but I’ve not heard of him saying “I saw x happen” and it wasn’t true. Assuming the account of what he himself saw was accurate it’s hard to imagine collusion wouldn’t be the purpose.

2. This sounds like something that would happen. VCs do this crap all the time, why not angels?

3. Publishing this might be bad for him, and if it were untrue, it would definitely be really bad for him.

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cletus 774 days ago | link

I believe it too. You succinctly enumerate the reasons. The biggest for me was that (he claims) he saw it happen. That puts his personal reputation at stake, which I think will have to meet a far higher standard than the rumour publishing “go tos” of “an anonymous source”.

The FB phone was (imho) classic Arrington (the bad side). Posted on the weekend (in the hopes that FB PR would be slow to respond and debunk it), quoting anonymous sources and no substance at all. Basically, link bait. That sort of story does him (or rather his credibility) no favours.

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swombat 774 days ago | link

Add to that that there is no convincing reasons why this group of angels would manufacture this story to lead him on. Unlike with some other TC stories which turned out to be manufactured to discredit TC, in this one, the sources themselves would risk a lot by leaking this – true or false.

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Alex3917 774 days ago | link

In Arrington’s defense his claims are laid out clearly without any weasel words. Either this is happening or it isn’t. So while I’m pretty meh about TC as a whole, I’m giving him the benefit of the doubt on this one.

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chc 774 days ago | link

He didn’t name a single name. If he really believed this was so certain, he could have. Unless he’s trying to make them do something, the only reason to keep names out of it is because he thinks this might be libel.

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swombat 774 days ago | link

He doesn’t need to expose himself to lawsuits by naming names. The names are pretty obvious to anyone in the

field.

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chc 774 days ago | link

Yes, but that’s the thing — you can’t get sued for “obvious names.” Even if he’s completely making this up, if one of the obvious suspects sues him, he can just say, “Oh, no, I didn’t mean him.”

The comment I was replying to said, “his claims are laid out clearly without any weasel words. Either this is happening or it isn’t.” I disagree with that — Arrington is not laying it all out here as a black-and-white truth.

He’s consciously omitting facts in a way that happens to shield him from repercussions if this is false. As a traditional dead-tree newspaper guy, I’m very familiar with the ways reporters fudge their claims to avoid being responsible if it turns out to be crap. That’s what this sounds like to me.

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eavc 773 days ago | link

If he calls them felons and they wind up being acquitted for whatever reason, however technical or stupid, then he would be liable for libel.

He clearly wanted to avoid using weasel words. The only way to do that without being reckless is to not refer directly to the objects of the post.

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techiferous 774 days ago | link

“the only reason” He did mention that they were his friends. Perhaps he wants to nip the illegal activity in the bud with as little collateral damage as possible.

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jnoller 774 days ago | link

I’m not going to disagree with that. As I said, I hope this is a mistake.

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origoterra 774 days ago | link

Arrington is smart, a lawyer himself, and already know he is headed straight to the witness stand. Thanks for blowing this whistle Mike. That’s the TC we like.

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seldo 774 days ago | link

I don’t know if witnessing a table full of people go silent when he turns up proves anything, and the rest is all info that would put his source on the stand, not him.

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danielnicollet 774 days ago | link

If you read the full post, take in account that he was present and saw who was there, and assume he has not chosen to reveal everything about the sources through TC at this time (that’s highly understandable – protecting his sources and only disclosing what he feels is verifiable), there is definitely a lot here and absolutely enough for a climb to the witness stand!

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tomjen3 774 days ago | link

I am not so sure – he said that several of the persons there were very uncomfortable with the deal, so being there alone would not be enough.

The rest is heresay, which is admissible in no non-kangaroo court that I know of.

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MediaSquirrel 774 days ago | link

I believe the saying that applies is: “Power corrupts…”

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cool-RR 774 days ago | link

I wouldn’t take anything he says seriously. [Edit: If it wasn’t clear, I meant Arrington, not Jesse]

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lsternlicht 774 days ago | link

I think your statement was clear. However, I find it hard to believe Arrington would put some of his best sources at risk if his claims were completely unfounded.

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onan_barbarian 774 days ago | link

Strange how any post that could be construed as being negative about Arrington gets down-modded by about 5 points, regular as clockwork. That being said, I think he’s on the money with this one.

This can only be good for YC overall. The suspicion that YC alternatives are all colluding against your startup is likely to make YC seem more attractive still, to the class of startup that would be wavering between YC and a rival.

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stanleydrew 774 days ago | link

Posts that consist of nothing more than subjective statements tend to get a lot of downvotes, not just the ones about Arrington.

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ori_b 774 days ago | link

The reason it’s always exactly 4 points of downvote is because hn caps the visible downvotes at 4, not because there are 4 shills.

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ericd 774 days ago | link

Super angels aren’t really an alternative to YC… they normally step in at the stage a company is at where YC normally ends.

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gruseom 774 days ago | link

I find it fascinating how the very qualities that lead people to call Michael Arrington an asshole are dramatically in evidence here. It takes a staggering immunity to social mores to walk in on a meeting of rich and powerful friends, friends who are connected to his own business in many ways (read: friends with leverage) and behave the way MA says he did, let alone go home and write that article. Very few people could do it. I’m not sure I could, to put it mildly. I particularly doubt if many (any) of Arrington’s competitors ever would. It may take a character disorder to be able to act this way.

In an age when journalists grade themselves by which power-brokers deign to have lunch with them (anybody see David Brooks prattling about this on Charlie Rose the other night? lunch and dinner, he said) it’s impressive to see anyone act like this. Especially if what he’s saying is true and this really is a matter of right and wrong.

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mrtron 774 days ago | link

I have always felt MA had a certain…brashness, abrasiveness, assholish tone, whatever you want to call it…about him. You could feel it in his articles.

I now feel it is not only helpful but entirely necessary for him to develop that quality in his career path.

Kudos for pushing the boundaries Mr. Arrington. The evidence speaks for itself – you don’t see this type of journalism in any industry anymore.

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jexe 774 days ago | link

Well, at least one investor seems to have accidentally included himself in the mess (from TC’s comments)

http://twitter.com/speechu/status/25083299594

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jakevoytko 774 days ago | link

This link is now a 404. Thankfully Google has the text of the tweet!

speechu: Bin 38 is like heaven right now, chock-full of angels.

Not explicitly incriminating, but it sounds pretty bad

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dzlobin 774 days ago | link

Strangely, it’s still on the feed. http://twitter.com/speechu

But the status link is deleted

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borism 774 days ago | link

real-time wonders of nosql?

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nostromo 774 days ago | link

I just put “forming a cartel” on my list of things not to tweet.

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mattmaroon 774 days ago | link

Unless you’re in Mexico. Then Tweeting is probably a good idea.

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mrduncan 774 days ago | link

The original tweet was removed in the past few minutes (others have dug it up again). His latest tweet doesn’t seem to be taking Arrington too seriously:

Thanks Mike for techcrunching me for no reason. Note to self: hold next secret meeting in underground bunker to get the feds off my trail.

Sundeep Peechu@speechu

Thanks Mike for techcrunching me for no reason. Note to self: hold next secret meeting in underground bunker to get the feds off my trail.

21 Sep 10 Reply
Retweet
Favorite

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dannyr 774 days ago | link

The tweet has been erased but somebody did an old-school retweet of it.

“Timestamp is 8p yesterday. RT @speechu: Bin 38 is like heaven right now, chock-full of angels. #superevil

#evidence cc @arrington”

Matt Mireles@mattmireles

Timestamp is 8p yesterday. RT @speechu: Bin 38 is like heaven right now, chock-full of angels. #superevil #evidence cc @arrington

21 Sep 10 Reply
Retweet
Favorite

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hanskuder 774 days ago | link

Tweet’s now deleted. That’s not suspicious at all.

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joshu 774 days ago | link

i’ve never heard of this guy before, and he isn’t a coinvestor on any deal i’ve been on…

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bl4k 774 days ago | link

he works with Aydin at Felicis

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ojbyrne 774 days ago | link

If I had some energy (and cared) I’d be on foursquare and gowalla right now

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pbiggar 774 days ago | link

It’s 404 for me. What did it say? (screenshot preferred)

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dannyr 774 days ago | link

Cached version:

http://cc.bingj.com/cache.aspx?q=http://twitter.com/speechu/…

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danilocampos 774 days ago | link

IANAL, but as I understand it…

Any time individuals or businesses get together to collaborate on a strategy that restrains trade or supply, thus artificially skewing prices, this runs afoul of antitrust law.

Collusion between angels to keep valuations low and prevent newcomers from participating sounds like a textbook case. In this case, they’re artificially inflating their cost of capital by reducing the overall valuations of the businesses they fund. They artificially reduce the supply of capital by conspiring to keep out new participants.

Similarly, the Department of Justice is looking into Valley hiring, since companies have a gentlemen’s agreement not to poach from one another:

http://www.forbes.com/feeds/ap/2010/09/17/technology-special…

In this case, the argument would go that the companies are artificially constraining the supply of paying work for qualified applicants, while reducing the competitive landscape that would drive up their salaries.

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nostromo 774 days ago | link

It sounds like price fixing, even though they are buying and not selling. Check out Wikipedia for a good write-up:

“Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand. The group of market makers involved in price fixing is sometimes referred to as a cartel. The intent of price fixing may be to push the price of a product as high as possible, leading to profits for all sellers, but it may also have the goal to fix, peg, discount, or stabilize prices. The defining characteristic ofprice fixing is any agreement regarding price, whether expressed or implied. Colluding on price amongst competitors is viewed as a per se violation of the Sherman Act regardless of the market impact.”

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j_baker 774 days ago | link“Would it still be price fixing if all of them got up from the table and announced the formation of Super Angel Capital Partners?”

Yes. That would effectively make SACP a cartel. Price fixing is price fixing if it was done by a group of entities or one entity.

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InclinedPlane 774 days ago | link

If they create a single super angel corporation then they could run afoul of anti-monopoly laws.

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tptacek 774 days ago | link

What? No they don’t. There’s no such thing as a “monopoly of angel investors”. There are as many angel investors as there are people with extra money to invest. In a lot of cases already, groups of powerful people with extra money to invest have already formed very famous companies to do exactly what we’re talking about!

Shouldn’t the DoJ be going after Kleiner and Sequoia first? Don’t hundreds of doctors and dentists already do stuff like this?

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j_baker 774 days ago | link“As if they owe anybody anything! They’re the ones taking the risks with their own money;” Right. And I’m sure they’re all doing it out of the kindness of their hearts. They’re definitely not intending to make money off of the deal.

Regardless, Arrington accuses them of discussing:

* How the group can act together to keep traditional venture capitalists out of deals entirely

* How the group can act together to keep out new angel investors invading the market and driving up valuations.

This is definitely sounds anti-competitive to me (assuming it’s true of course).

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prostoalex 774 days ago | link

My buddy and I in college colluded to maintain market conditions on Lamborghini prices. As far as I can say, 300 million other Americans are participating in this. Our agreement was specifically regarding price (and lack of 0% financing).

</sarcasm>

I think in buyer’s market it only makes sense when the supply of buyers is artificially limited. Not only it doesn’t look like there’s any shortage of capital, the conversation in question specifically discussed excluding new angel investors, furthering the point.

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ctkrohn 774 days ago | link

If the FTC determines that the joint venture would form a monopoly, they could in fact block it on antitrust grounds. The FTC blocks mergers all the time.

Explicit cooperation in restraint of trade is always illegal, though.

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icey 774 days ago | link

According to Wikipedia [1], there were over 250,000 angel investors active in 2007. If 10 of those investors were to get together to form a “super-group”, I’m not sure it would match up with the definition of a monopoly. I don’t know anything about the collusion arguments though.

[1] http://en.wikipedia.org/wiki/Angel_investor

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ctkrohn 774 days ago | link

I agree. Not saying they’re a monopoly. The merger-blocking issue is the only reason I can think of for a joint venture being illegal.

The difference is that explicit collusion is ALWAYS illegal. Otherwise innocuous activities that may have an anticompetitive effect (e.g. forming a joint venture) are sometimes legal, depending on what the FTC thinks.

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jon_dahl 774 days ago | link

The real question would be their investment market share, right? There might be 500 companies building operating systems, but a Microsoft/Apple merger would probably be a monopoly concern.

That said, while their market share is certainly larger than 10/250,000, it probably doesn’t even approach 10%. So you’re probably right.

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jessriedel 774 days ago | link

True, but you need to consider possible sub-markets. They might have much less than 10% of angel funding nationwide, but 60% of tech angel funding in the bay area. Or something like that. It all depends on how the regulators draw boundaries around markets.

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dschobel 774 days ago | link

Why would VC firms meeting and agreeing to change terms for their clients in lock-step not be collusion whereas if the brick and mortar banks did, it would be? (and was: http://redtape.msnbc.com/2008/04/did-banks-collu.html)

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j_baker 774 days ago | link

It turns out that banks are exempt from antitrust laws:

http://en.wikipedia.org/wiki/United_States_antitrust_law#Exe…

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dschobel 774 days ago | link

You’re referring to the Edge Act [1][2] and that only applies to US banks’ foreign operations (their subsidiaries,

to be specific).

It is still very much illegal for them to collude against US customers.

[1] http://en.wikipedia.org/wiki/Edge_Act

[2] http://www.answers.com/topic/edge-act-corporation

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pvg 774 days ago | link

I have no idea whether this specific arrangement is legal or falls under laws regulating price fixing but it is fundamentally different from a JV – there is transparency in the case of a JV so someone looking for financing knows they are dealing with the same entity. If it was the same thing as a JV, parties doing the collusion wouldn’t bother to do it in secret.

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InclinedPlane 774 days ago | link

Buying stock is also just investing. So is providing a loan. That doesn’t mean those activities aren’t subject to laws and regulations.

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navyrain 774 days ago | link

I cannot speak to the letter of the law, but I’d venture to say the alleged misbehavior violates at least the _spirit_ of the law, since these angels would be considered competitors outside of that room.

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jnoller 774 days ago | link

I’d like to know the laws too, this could be construed as collusion, conspiracy and probably a few other things.

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tptacek 774 days ago | link

How? What market power are they exploiting? There’s no conceivable monopsony for “shares of all startups”.

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jnoller 774 days ago | link

They are a group of people supposedly conspiring to generate the worst possible terms for the people they are providing money to, while trying to force out or marginalize competition.

IANAL though – even if not illegal, it’s still pretty stinky, and a big part of me hopes it’s not illegal. If it’s not illegal, I hope they’re outed and shamed if this is true. If it is illegal, it give the government reason to step in and screw everything up.

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tptacek 774 days ago | link

Or, this is a group of people collaborating to generate the best possible outcome for their own business. Every joint venture can be framed in anticompetitive terms. But in this case, what possible undue market influence can they have? The market will find other people to take these deals.

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jnoller 774 days ago | link

This is a group of people, comprising the top angel investors in a given area, investing lots of money, into a lot of companies, supposedly discussing – in private – how to “divide the market” and “set prices” and “exclude/marginalize competition”. Angel investors, despite being individuals, still have regulations and laws to follow.

Frankly, I think the feds would jump at the chance to have an excuse to jump in and more tightly regulate/tax/etc the entire system, including angel investors.

You could very well be right; admittedly, I’m not the smartest tool in the shed when it comes to understanding FTC and government investment regulations, as well as the legal status of angel investors.

Heck, I really hope this is all wrong, because the last thing I want is the feds meddling in this industry even more. I make my living on startups; the last thing I want is the federal government to make it wither and die.

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j_baker 774 days ago | link

“Every joint venture can be framed in anticompetitive terms.”

Semantically yes. But is every joint deal bad for the market?

“The market will find other people to take these deals.”

Don’t be naive. Anticompetitive practices are specifically meant to prevent the market from functioning normally.

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dschobel 774 days ago | link

That’s an unrealistically high standard and I can’t think of any recent case which would meet it. Why didn’t the market find a solution to Microsoft in the 90′s or Intel in 2000′s and, more importantly, why did the Feds feel the need to intervene?

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tptacek 774 days ago | link

Microsoft owned the entire personal computing platform and was using it to put new companies in marginally related markets out of business.

Are you suggesting that 10 angel investors have control over all the money? Is one of them Lex Luthor?

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blueben 774 days ago | link

Because bay area technical angel investing isn’t just about writing cheques. It’s about managing and guiding those startups, helping them find the resources they need. It’s about leveraging your connections throughout the industry to help them grow sales, build manufacturing, hire talent, or any of a hundred other things. This is why startups go back to these handful of investors over and over again. Founders aren’t stupid. They know these investors wield serious power in the tech world, and they want that power to be on their side. If you think the only requirement to being an angel investor is having a big bank account, you haven’t been paying attention.

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dschobel 774 days ago | link

I’m not suggesting it, Arrington flat out said it. He was there and knows the VC players better than anyone.

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notahacker 774 days ago | link

If (i)most angel investors are significantly less likely to make investments in early stage tech startups at a given price and/or (ii)due to connections these investors provide a significant non-monetary value-add to the startups they invest in then it’s conceivable they might wield a significant amount of market power.

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inerte 774 days ago | link

A joint venture (or a legal entity aka as a company) operates under very different rules than parties working together, probably without a contract.

I don’t know how the antitrust laws apply, not even if what they are doing collude with any law at all, despite preventing healthy competition, but your questions come from the wrong premises.

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tptacek 774 days ago | link

As we just saw with TechCrunch v FusionGarage, the paper contract has little to do with whether something is or isn’t a joint venture.

Broaden the word “antitrust” to “laws against all contracts in restraint of trade”, and re-ask the question to yourself. These people are investors. Investors are allowed to work together, aren’t they?

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tptacek 774 days ago | link

Before I turn into “the guy on the thread arguing that the Evil Angels are just peachy”, banding together for the sole purpose of pushing back YC and making life harder for founder is a total dick move, and I’m happy Arrington is shaming them for it.

But it is a much more ambitious claim to say that they’re breaking federal laws by doing it.

—————————————————————————
Federal funds flow to clean-energy firms with Obama administration ties

By Carol D. Leonnig and Joe Stephens, Washington Post
Sanjay Wagle was a venture capitalist and Barack Obama fundraiser in 2008, rallying support through a group he headed known as Clean Tech for Obama.

Shortly after Obama’s election, he left his California firm to join the Energy Department, just as the administration embarked on a massive program to stimulate the economy with federal investments in clean-technology firms.

Following an enduring Washington tradition, Wagle shifted from the private sector, where his firm hoped to profit from federal investments, to an insider’s seat in the administration’s $80 billion clean-energy investment program.

He was one of several players in venture capital, which was providing financial backing to start-up clean-tech companies, who moved into the Energy Department at a time when the agency was seeking outside expertise in the field. At the same time, their industry had a huge stake in decisions about which companies would receive government loans, grants and support.

During the next three years, the department provided $2.4 billion in public funding to clean-energy companies in which Wagle’s former firm, Vantage Point Venture Partners, had invested, a Washington Post analysis found. Overall, the Post found that $3.9 billion in federal grants and financing flowed to 21 companies backed by firms with connections to five Obama administration staffers and advisers.

Obama’s program to invest federal funds in start-up companies — and the failure of some of those companies — is becoming a rallying cry for opponents in the presidential race. Mitt Romney has promised to focus on Obama’s “record” as a “venture capitalist.” And in ads and speeches, conservative groups and the Republican candidates are zeroing in on the administration’s decision to extend $535 million to the now-shuttered solar firm Solyndra and billions of dollars more to clean-tech start-ups backed by the president’s political allies.

White House officials stress that staffers and advisers with venture capital ties did not make funding decisions related to these companies. But e-mails released in a congressional probe of Obama’s clean-tech program show that staff and advisers with links to venture firms informally advocated for some of those companies.

David Gold, a venture capitalist and critic of Obama’s investments in clean tech, said that even if staffers had been removed from the final decision-making, they had the kind of inside access to exert subtle influence.

“To believe those quiet conversations don’t happen in the hallways — about a project being in a certain congressman’s district or being associated with a significant presidential donor, is naive,” said Gold, who once worked at the Office of Management and Budget. “When you’re putting this kind of pressure on an organization to make decisions on very big dollars, there’s increased likelihood that political connections will influence things.”

Energy Department spokesman Damien LaVera said the companies won awards based on merit, not political connections. He said the staffers and advisory board members reviewed by the Post had no role in funding decisions, nor did they have any personal financial stake in the companies. One of those administration advisers had first been appointed to his position by the Bush administration, LaVera said.

“As is evident from the 10-month long congressional investigation into Solyndra, Energy Department loans and grants are decided on the merits,” White House spokesman Eric Schultz said. “What’s more, these are all professionals with expertise in clean-energy science, finance or both — but none of them play a decisional role in DOE awards and none of them are in positions of regulating the industry.”

Venture capitalists arrive

During the 2008 campaign, the venture capital industry lined up behind Obama as he vowed to spur clean-technology development. Obama raised more than twice the venture capital contributions of his opponent, Republican candidate John McCain.

Known for making billions of dollars in the 1990s on Internet startups, venture firms in 2006 were rapidly switching to invest in clean tech. Legendary venture partner John Doerr, a leading early investor in Google and Amazon, that year called the clean-energy sector the next great profit center, “the mother of all markets.”

With the 2008 economic crisis, new private investment in fledgling clean-tech companies withered. But passage of the $787 billion stimulus package offered new opportunities to launch and grow those firms, with $80 billion set aside for clean energy and energy-efficiency efforts.

Suddenly flush with cash, the Energy Department was under orders to ramp up quickly and get money out to promising companies. The administration tapped industry players to take on key Energy Department roles, both as agency staffers and outside advisers on agency boards.

Wagle, then 38, took a job as a stimulus adviser in the agency’s recovery act office. Officials say his role did not involve making funding decisions for companies tied to Vantage Point.

Private investors cheered the administration for hiring industry colleagues. In a 2009 article, venture firm leader Jim Matheson said Wagle, along with another Washington-bound venture capitalist, David Danielson, would help ensure commercial successes from “the steady flow of dollars coming out of D.C.”

Wagle’s former employer had invested in several companies that received federal money: Brightsource, which won a $1.6 billion federal loan for a solar-generating plant; Tesla Motors, which won a $465 million loan to build electric cars; and biofuels firm Mascoma, which in 2011 received $80 million for a Michigan ethanol plant.

Wagle recently returned to the California venture capital industry to work as an investor and clean-tech adviser. Reached at his home, he declined to comment. Vantage Point Venture Partners, renamed Vantage Point Capital Partners, did not respond to requests for comment.

Danielson, formerly of General Catalyst, joined an Energy Department office whose mission was to fund breakthrough energy technologies. Officials say he had no role in arranging $105 million in funding for three General Catalyst portfolio firms.

David Sandalow, a former Clinton administration official and Brookings Institution fellow, had been paid $239,000 for consulting work for a venture capital firm, Good Energies, in 2008 before joining the Energy Department as assistant secretary for policy and international affairs, his disclosure form shows.

A Good Energies-backed firm, SolarReserve, won a $737 million agency loan. Officials say Sandalow played no role in arranging it and LaVera, speaking on behalf of Sandalow, said the assistant secretary had no financial interest in Good Energies or SolarReserve.

The Energy Department came under criticism from Republicans earlier this year when agency e-mails raised questions about a possible conflict of interest involving Steven J. Spinner, a former department loan adviser who disclosed that his wife worked for Wilson Sonsini, a Silicon Valley law firm that handled funding applications for several clean-tech companies.

Wilson Sonsini’s clean-tech clients reaped $2.75 billion in Department of Energy grants and financing, the Post analysis found.

One of the firm’s clients was Solyndra. Republicans have accused the Obama administration of favoring the risky company because its leading investor was tied to a major Obama donor.

Wilson Sonsini had its own connection to the White House: the firm’s chief executive, John Roos, was a top bundler for Obama’s 2008 campaign.

Before joining the administration, Spinner, a venture investor and start-up adviser, also helped raise $500,000 for Obama as a member of his national campaign finance committee. He has pledged to raise a half-million dollars or more for Obama’s reelection effort.

Once inside the agency, Spinner agreed not to discuss loan matters involving Wilson Sonsini clients. But e-mails show he urged career officials to resolve delays in the Solyndra loan, and also defended the financial prospects of Solyndra to a White House deputy before its federal loan was approved.

Spinner left the Energy Department in the fall of 2010. He did not respond to requests for comment. The department said Spinner was not involved in the company’s application review or loan approval.

A Wilson Sonsini spokesman said the firm does not believe its employment of Spinner’s wife influenced Energy Department decisions.

Investors as advisers

Thousands of agency and White House e-mails released as part of the Solyndra investigation show that venture capitalists who held advisory roles with the Energy Department were given access to Obama’s top advisers.

Steve Westly, an Obama fundraising bundler for both his 2008 and 2012 campaigns, is a founder of the venture firm Westly Group and served part time on Energy Secretary Steven Chu’s advisory board.

The e-mails show that Westly communicated with senior White House officials, including Obama adviser Valerie Jarrett, voicing concerns about the president’s planned appearance at Solyndra.

Westly’s firm also fared well in the agency’s distribution of loans and grants. Its portfolio companies received $600 million in funding. LaVera said Westly had no role in the funding decisions.

David Prend also surfaces in the e-mails as a venture capital investor who had White House access.

His firm, Rockport Capital Partners in Boston, was among the investors in Solyndra, with a 7.5 percent stake. The e-mails show him asking a White House aide to “help get the word out” about Solyndra and asking for help on another Rockport portfolio company. They show he and a group of venture capital investors met with new White House climate czar Carol Browner before Solyndra’s loan was tenatively approved, and the White House confirmed that the subject of the company came up briefly.

Prend had worked closely with the Energy Department since the Bush administration, when he was first appointed to an advisory panel for the National Renewable Energy Laboratory. He continued to advise the Obama administration, while also chairing a panel that helps advise the department on solar technologies.

The agency provided $550 million to several firms in which Rockport had invested at the time. The department gave an additional $118 million grant to an electric-car battery company, Ener1, that was partnered with Rockport portfolio car company Think. (Rockport soon after invested in Ener1.) Ener1 filed for bankruptcy protection last month.

LaVera and Chad Kolton, a Rockport spokesman, said that Prend’s advisory role was separate from stimulus programs and had no bearing on agency decisions about companies backed by Rockport.

Research editor Alice Crites contributed to this story.
————————————————————————–

POTOMAC WATCH
May 24, 2012, 7:24 p.m. ET

Vulture Capitalism? Try Obama’s Version
A profit-driven economy is preferable to one run by political favoritism.

President Obama is no fan of Mitt Romney-style “vulture” capitalism. So what’s his
alternative? Tweet 127
All those Republicans grousing about the president’s attacks on private equity might instead be seizing on this beautiful point of contrast. Mr. Obama, after all, is no mere mortal president. Even as he’s been busy with the day job, he’s found time to moonlight as CEO-in-Chief of half the nation’s industry. Detroit, the energy sector, health care—he’s all over these guys like a cheap spreadsheet.
Like Mr. Romney, Mr. Obama has presided over bankruptcies, layoffs, lost pensions,
run-ups in debt. Yet unlike Mr. Romney, Mr. Obama’s C-suite required billions in taxpayer dollars and subsidies, as well as mandates, regulations, union payoffs and moral hazard.
Don’t like “vulture” capitalism? Check out the form the president’s had on offer these past three years: “crony” capitalism. The case study is the solar-panel maker Solyndra, which was part of a green-energy sector that even by 2009 was flailing. The president took one look at the industry’s utter lack of both profits and sellable products, and yelled “that’s my baby!” The stimulus bill shipped tens of billions of dollars to the Energy Department to pour into green companies via grants and loans. It promised five million jobs.
The Energy Department’s nuclear physicists were admittedly a bit flummoxed by the
whole P&L thing, but they got their venture-capitalism groove on and in 2009 handed Solyndra a $535 million loan guarantee. Even prior to disbursement, government accountants were warning that Solyndra was a lemon, but the White House didn’t worry.
After all, the IRS had only recently and conveniently tripled the tax credit (to 30%) for buyers of Solyndra products, which the government figured would help grease their start-up’s skids.

Items for auction at Solyndra headquarters in Fremont, Calif.
Bloomberg

Unfortunately, the physicist-CFOs overlooked that whole “global energy market” factor—easy mistake! Foreign competitors were already piling into Solyndra’s niche. Unable to compete, the firm went bankrupt last year. And, oh, the carnage! It was kind of like . . . GST Steel! Only worse. Solyndra laid off 1,100 employees. It provided no severance, not even back pay due for vacation credits.

But a bankruptcy judge would later approve $370,000 in bonuses for 20  employees. Mr. Obama railed against the high-dollar Silicon Valley investors who lined up in front of government to “suck” the remaining “life” out of the bankrupt firm, even as employees were left to . . . Oh, wait. He said no such thing. He was probably too busy doing damage control on his other government subsidized
energy bankruptcies, from Beacon to Ener1.

Or running down the latest report of a government-funded, instantaneously combusting electric car. (Karma, anyone? Now at the low, low price of $103,000.
Fire extinguisher included.)

Speaking of cars, Detroit is the business venture Mr. Obama’s team has been most
flogging as a success. True, General Motors and Chrysler are still turning their lights on, though they’d have arguably been doing the same had they been left to go through normal, orderly bankruptcies like those that helped the steel and airline industries restructure to become more competitive.

To get to the same place, Mr. Obama’s crony capitalism handed $82 billion in taxpayer dollars to the two firms. That bailout money went to make sure the unions that helped drive GM to bankruptcy (and helped elect Mr. Obama) did not have to give up pay or pension benefits for current workers. They were instead rewarded with a share of the new firm. The UAW at GM meanwhile used the government-run bankruptcy to bar some 2,500 nonunion workers who had been laid off from transferring to other plants. How truly vulture-like.

Contract law was shredded, as unions were given preference over other creditors, such as pension funds for retired teachers and police officers. Congressmen used political sway to keep open their weak auto dealerships, forcing layoffs at stronger ones (vulture . . . vulture . . . vulture). Political masters obliged the industry to pour resources into unpopular green cars. The political masters were obliged to offer $10,000 tax credits to convince Americans to buy them. (They still won’t.) And the message to every big industry? Go ahead, run your business into the ground. The Capitalist-in-Chief has your back (especially if you are unionized).

So, take your pick. Mr. Obama’s knock on free enterprise is that it is driven by “profit,” and that this experience makes Mr. Romney too heartless to be president. The alternative is an Obama capitalism that is driven by political favoritism, government subsidies, mandates, and billions in taxpayer underwriting—and that really is a path to bankruptcies and layoffs. If the president wants to put all 3,545 green stimulus jobs he’s created up against Bain’s record, he should feel free.
Mr. Romney could make the comparison himself. Ronald Reagan ran against Jimmy
Carter’s own industrial policy, and to great success. Viewed in isolation, “vulture”
capitalism has some PR downsides. Viewed against the alternative, it’s a flat-out winner.
Write to
kim@wsj.com

————————————————————————-

Political Payback: Green Corruption –– Part One

http://blogcritics.org/politics/article/obamas-political-payback-green-corruption-

Author: Christine Lakatos — Published: Jul 30, 2010

Alarmingly, our environment has been hijacked by uber-rich individuals, crooked politicians, and an assortment of left-wing extremists that are fueled by greed and power attached to a radical agenda to bring about “global governance,” “redistribute the wealth,” and put the progressive movement –– big government, social justice and the death of capitalism –– on the fast track. Under the guise of “saving the planet,” these “players,” who are all interconnected in a variety of ways, are transforming our climate into something more sinister –– a scam of epic proportions.

Due to its magnitude and the potential dire consequences to our economy, our freedoms, and the voices of the honorable environmentalists –– this “Climate Scam” will be confronted in three parts.

TROXLER AND BROWN PREDICTIONS OF GREEN CORRUPTION CONFIRMED

This year, Lee Troxler and Floyd Brown in their newly released hit book, Killing Wealth, Freeing Wealth How to Save America’s Economy and Your Own, chapter ten –– The Biggest Financial Bubble in US History, is where the authors’ predicted that the veteran Silicon Valley venture-capital firm Kleiner Perkins Caufield & Byers (KPCB) –– multi-millionaire Al Gore and billionaire John Doerr are both partners –– would get government contracts from the Obama administration unfairly.

In developing this story, which took months of research, backed up with extensive resources, we learned through an anonymous source that there are multiple federal investigations from different agencies and senators underway against the Department of Energy (DOE), in particular, the Loan Guarantee Program (LGP) and possibly others. Our source, who is close to the some of the ongoing investigations –– “guarantees there was corruption and bad ethics involved” and that at this time “a number of the investigations are getting stonewalled.” Our findings, along with this recent inside information, confirms Troxler and Browns’ predictions –– corruption on the “green front.”  As we learn more, we will share the details.

At this time we do know that the U.S. Government Accountability Office (GAO) has been in the process of reviewing –– in response to Congress’ mandate –– the DOE’s execution of the Loan Guarantee Program (LGP), which was established as part of the Energy Policy Act of 2005 and set up for innovative energy projects.  About two weeks ago (July 12, 2010), the GAO released their findings and recommendations, noting that the “LGP scope has expanded both in the types of projects it can support and in the amount of loan guarantee authority available. DOE currently has loan guarantee authority estimated at about $77 billion and is seeking additional authority.”

At issue, the DOE’s lack of “comprehensive performance goals,” particularly in relation to the DOE’s “broad policy goal of helping to mitigate climate change and create jobs.” The GAO concludes, “Without comprehensive performance goals, DOE lacks the foundation to assess the program’s progress and, more specifically, to determine whether the projects selected for loan guarantees help achieve the desired results.”

Predictably, the GAO also found that the “DOE’s implementation of the LGP has treated applicants inconsistently, favoring some and disadvantaging others, as well as the fact that the “DOE lacks systematic mechanisms for LGP applicants to administratively appeal its decisions or to provide feedback to DOE on its process for issuing loan guarantees.”

OBAMA’S GREEN STIMULUS

In February 2009 Congress passed the American Recovery and Reinvestment Act (ARRA), the $862 billion stimulus package, for which $86 billion was earmarked for “green,” of which the Apollo Alliance –– a left-wing organization who exerts a powerful influence on the views and policies of the Obama administration –– was also involved in drafting. More on Apollo later, but Kleiner Perkins are like ants at a picnic; they’re everywhere that’s green, including on the Apollo board, where they have placed one of their partners, Ellen Pao. Furthermore, Obama was a candidate that both Gore and Doerr had strenuously campaigned for, including financial donations, and early on, Doerr had his hand in shaping ARRA, “urging” Obama’s transition team and leaders in Congress “to use the new economic stimulus package to modernize the electric grid and offer new incentives to help clean energy startups get off the ground.” Doerr also sits on Obama’s Economic Recovery Advisory Board (PERAB), who President Obama appointed as one of the “chosen” back in January 2009.

In following the ARRA, meant to stimulate the economy and create jobs, it is clear that the Obama administration is circuitously funneling government contracts to their favored companies –– “stimulating” the “green” pockets of Kleiner Perkins. This screams corruption and it’s time to call in a special prosecutor!
FOLLOW THE “GREEN” MONEY: KPCB GREENTECH PORTFOLIO
Since last summer when the Department of Energy (DOE) starting handing out the $86 billion “green stimulus” money, Gore and Doerr’s “green companies” have been cashing in big time –– billions of taxpayer dollars!  Keep in mind, this doesn’t account for funds not yet allocated, or hidden contracts, nor the mass amount of money KPCB and others in the Climate Scam will generate if the U.S. climate legislation becomes law –– “Obama Climate,” more specifically cap-and-trade, which will be covered in more detail later.

So far over fifty percent of the companies listed on the Kleiner Perkins Caufield & Byers Greentech Portfolio, of which KPCB partners are positioned on the board of many, have –– directly and indirectly –– received money from the “Obama Green Stimulus” package as well as through other government programs approved by the Obama administration.

AL GORE’S FISKER AUTOMOTIVE  $529 MILLION DOE LOAN IGNITES RED FLAGS

One of the most blatant government favoritism, catching headlines in the Wall Street Journal back in September 2009 –– Gore-Backed Car Firm Gets Large U.S. Loan –– was the $529 million dollar government loan guarantee (which was cinched in May 2010) that Fisker Automotive received to build its high-end, hybrid sports coupe, Fisker Karma –– to be manufactured in Finland and sold for $89,000.  Fisker Automotive was a 2008 investment for Kleiner Perkins and it was “confirmed” that Gore has already purchased his “Karma.”

In June 2009 the DOE announced three other large government loans that included $5.9 billion to Ford Motor Company, $1.6 billion to Nissan Motors, and $465 million to Tesla Motors. Although the four loans came out of the DOE’s $25-billion Advanced Technologies Vehicle Manufacturing (ATVM) Loan Program, it was approved by the Obama administration and it did ignite some red flags.
As reported by the Wall Street Journal, “the awards to Fisker and Tesla prompted criticism from groups that question why vehicles aimed at the wealthiest customers are getting loans subsidized by taxpayers” and “concern from companies that had their bids for loans rejected,” Included in the reaction was Leslie Paige, a spokeswoman for Citizens Against Government Waste, “This is not for average Americans.” “It’s status symbol thing,” Ms. Paige added. More gripping is the fact that this “favoritism” didn’t sit well with some of the firms that were turned down for loans from the DOE –– stating “they did not get much feedback from the department about their applications” and “were unable to get a full explanation as to why their loan request was turned down.”

THE VINOD KHOLSA CONNCECTION

The CEO of EcoMotors John Colettie, whose $20 million ATVM loan from the DOE was denied, didn’t have an “issue” with the winners. Probably because EcoMotors’ lead investor is Vinod Khosla, an affiliated partner of Kleiner Perkins, whose firm Khosla Ventures has also invested in some of the same companies as Kleiner Perkins, which have received government funding including Obama Green Stimulus cash. Those companies include; AltaRock Energy Inc., $25 million grant from the stimulus; Amyris Biotechnologies, $25 million grant from the stimulus; and Mascoma Corporation has received state and federal grants from the DOE since 2006, totaling over $170 million and as recent as 2008, received another $49.5 million in funding from the DOE and the state of Michigan.

SILVER SPRING NETWORKS SCORES OVER $700 MILLION IN SMART-GRID GREEN STIMULUS FUNDS –– RIGGING THE BIDDING PROCESS?

One of the most contentious of Obama Green Stimulus money awards comes out of the ashes of the  $4 billion smart-grid grants, with some of the nation’s largest providers of electricity meters “crying foul” over the smart-grid standards in the stimulus bill, according to a report by USA TODAY in February 2009. Additionally, they said that the economic stimulus bill “could put them out of business and wreak havoc in the new market for smart-grid technology by favoring certain computer network standards.”

Itron, Landis+Gyr, Elster and Aclara even wrote a letter to U.S. Senators to voice their concerns regarding the “protocols and standards” that were placed into the House version of the legislation for all smart-grid projects, which states that “utilities receiving funding must use Internet-based or other open protocols and standards if available and appropriate.” Ed Gray, vice president of regulatory affairs for smart-meter provider Elster, said “the bill gives a leg up to Silver Spring at the expense of other providers.”

Interestingly, in March 2009, a month after the stimulus bill had already passed, Jeff St. John from GreenTechMedia.com, quoted a statement made by Stuart Bush, an alternative energy analyst for RBC Capital Markets, “both Trilliant and Silver Spring (both smart-grid communications companies) could benefit from the way the stimulus plan was structured to require open standards.” Bush also added, “Clearly the West Coast VC guys had a lot of lobby pull getting that in there.”

Clearly the “West Coast VC guys” –– Kleiner Perkins (Gore and Doerr), have more than “lobby pull.” In fact, Silver Spring Networks, as revealed in Troxler and Browns book, is one of Kleiner Perkins shining “green” companies –– their 2008, $75-million investment has scored over $700 million! Since August of 2009 when the DOE started dishing out the $4-billion from the Smart Grid Investment Grant Program (part of the stimulus plan) –– awarded to selected utility companies for particular smart-grid projects –– close to sixty percent of Silver Spring “customers” were winners.

•    American Electric Power (AEP) received $75 million for AEP Ohio gridSMARTSM Demonstration Project, announces earth2tech.com in August 2009. It should be noted here that Richard Sandor is on the AEP board. Sandor, Chairman and founder of the Chicago Climate Exchange, who is connected to President Obama and Al Gore, is another key “player” in this Climate Scan, which will be exposed later.

•    Bluebonnet Electric Cooperative got $18.8 million for a general smart- grid build out in Texas as reported in August 2009 by earth2tech.com. Additionally, in November 2009 Austin’s Pecan Street Project won $10.4 million in federal stimulus money to create a smart-grid demonstration project, which includes Bluebonnet as part or their Technology Review and Advisory Committee.

•    In October 2009 Florida Power & Electric was awarded $200 milllion for Energy Smart Florida –– posted by earth2tech.com.

•    In April 2010 Pepco Holdings Inc. signed contracts for three ARRA grants totaling $168.1 million to advance smart-grid projects, reported by the Washington Business Journal. Additionally in April 2010, Secretary of Energy Steven Chu announced $100 million from the stimulus will go for Smart Grid Workforce Training and Development, of which Florida Power & Light got $5 million and Pepco got just over $4.3 million.

•    In October 2009, “the U.S. Department of Energy announced that Modesto Irrigation District (MID) was one of only six California utilities selected to receive a $1.5 million federal stimulus grant to support MID’s efforts to install smart control equipment throughout its electric infrastructure” –– published in an Oracle Press Release.

•    Oklahoma Gas and Electric Co. received a $130 million stimulus grant for a 771,000 smart meter deployment, as reported in October 2009 by GreenTechGrid.com.

•    Sacramento Municipal Utility District got a $127.5 million stimulus grant for a comprehensive regional smart-grid system, announced in October 2009 by GreenTechGrid.com.

•    According to an August 2009 article by earth2tech.com, Pacific Gas and Electric (PG&E) –– another Silver Spring customer –– “applied for $42.5 million government grant for home area networks in conjunction with the city of San Jose and Stanford University,” yet it is unclear whether or not they received it. However, in May 2010, the DOE awarded PG&E a $25 million stimulus grant to develop compressed air storage for electricity” –– writes the San Francisco Business Times.
But the “government bucks” don’t stop at Silver Spring Networks…

Ausra Inc.
Ausra Inc. –– a KPCP investment that “develops and deploys utility-scale solar technologies,” was acquired by AREVA Inc. in March 2010. Then in July 2010 “AREVA accepted the U.S. Department of Energy’s (DOE) offer of a conditional commitment to issue a $2 billion loan guarantee to support construction of the Eagle Rock Enrichment Facility, AREVA’s $3 billion state-of-the-art gas centrifuge enrichment plant in Bonneville County, Idaho.”

Bloom Energy
Bloom Energy –– Kleiner Perkins is listed as a primary investor and John Doerr as a board member –– in February 2010 launched its Bloom Box. The real name is the “Bloom Energy Server” and is marketed as “a stand-alone electric generator that requires no connection to any centralized power generating plant and no coal-based or oil-based fuel to operate it” (translation: cheap, clean energy flows almost magically from a refrigerator-sized box). The Bloom Box debuted in a “big scoop” segment on 60 Minutes on February 21, 2010, followed with a star-studded (Governor Arnold Schwarzenegger and Colin Powell) Bloom Energy Press Conference attended and filmed by TheAutoChannel.com.  Marc J. Rauch Executive Vice President/Co-Publisher of The Auto Channel noted  “our contact [at the National Renewable Energy Labs (NREL) in Colorado] had known of the Bloom technology and revealed that the government had actually provided a $5 million grant to the company during its development stage. There are also rumors (and news) of “an enormous government contract to order the Bloom Box” and Bloom Energy “is due for a verdict on their DOE stimulus funds shortly,” as reported by GreenTechMedia.com, February 19, 2010.

Harvest Power Inc.
Harvest Power Inc., backed by Kleiner Perkins, is basically a company that “turns trash into fertilizer and fuel,” and according to a June 2009 article by  GreenEnergyNews.com and a City of San Jose Press Release, “GreenWaste Recovery would partner with Harvest Power Inc. on a project (if approved by the city council) known as the Zanker Road Biogas facility.” Mayor Chuck Reed said in a statement, “This project not only demonstrates San Jose’s leadership in the production of renewable energy but will help us meet the economic development, zero waste and energy goals of our city’s Green Vision,”
Evidently, the Green Vision is raking in big bucks from the Obama Green Stimulus, as reflected in their 2009 Annual Report –– “In 2009 over $50 million in federal and state grant money, including federal stimulus dollars were allocated or awarded towards projects that will advance Green Vision goals.” Additionally, “local companies received over $80 million in federal tax credits that will spur expansions and hiring in sectors such as renewable energy,” and as of May 2010, the City of San Jose –– Capitol of Silicon Valley –– “is estimated to receive nearly $108 million in Recovery Act funds.”

MiaSolé
MiaSolé Thin-film Solar, part of the KPCB Greentech Portfolio, with “more than 500 applications that were submitted for the tax credits,” in January 2010 MiaSole “received two Advanced Energy Manufacturing tax credits totaling $101.8 million from the Obama administration for the manufacture of low-cost thin-film cells and modules.”

RecycleBank
RecycleBank –– another Kleiner Perkins green investment –– works with municipalities and haulers to measure and reward residents for recycling. As reported by RecycleBank, “in April 2009 $2.8 billion were allocated to cities with 14 uses that include recycle projects.” It turns out that Philadelphia, Pennsylvania; Houston, Texas; and Hartford, Connecticut were the first cities to “take advantage of stimulus funds and work with RecycleBank to improve their waste diversion rates.”  Also, in August 2009, Chicago became the first Illinois city to partner with RecycleBank, then there are the cities in between, and recently in February 2010, Los Angeles became the largest city to partner with RecycleBank.
While it is obvious that the folks at Kleiner Perkins have strategically positioned their investments to profit from “green,” including the massive influx of taxpayer money, placing them ahead of the competition –– still others need government mandates and regulations to really make them fly. One company in particular is Hara Software, “a company that sells software to help businesses measure and reduce their greenhouse gas emissions,” where three KPCB partners sit on the Hara board. In a June 2009 article by Reuters –– Gore-Backed Hara Sees Profit From Low-carbon Economy –– Hara Chief Executive Amit Chatterjee, who in July 2009 was part of a group of “innovative energy leaders” that “advised Obama,” stated that [cap-and-trade] “will force companies to act, as opposed to seeing the business benefit of acting.” “The debate alone of ‘cap and trade’ is a driver for our product,” Chatterjee added.

Considering the magnitude of this Climate Scam –– its scope; cost and paybacks; “players” and agendas –– these findings may only scratch the surface. This Climate Scam goes beyond the billions of taxpayer dollars that Gore and Doerr, via Kleiner Perkins, have already unfairly snagged from the Obama Green Stimulus and huge DOE grants and loans.  More disturbing is the fact that these “players” –– and others that will be exposed in Green Corruption parts two and three –– have direct ties to the Obama White House, strong influence over government policy, and are connected to the rest of those caught up in this scam, including the hard-core-left-wing radicals

Moreover, most of “the players” have helped create, shape, facilitate, lobby, testify, sell, and even if the planet blows up, will get their cap-and-trade, which despite reports that it’s dead in the Senate, will soon to be on the Obama agenda –– the real pot of gold at the end of the “climate rainbow.”

Article tags
•    ”green” investments
•    • Al Gore
•    • American Recovery and Reinvestment Act
•    • Apollo Alliance
•    • billions of taxpayer dollars
•    • Cap-and-Trade
•    • Climate Scam
•    • Department of Energy
•    • eds-pick
•    • Floyd Brown
•    • global warming
•    • Government Accountability Office
•    • government corruption
•    • John Doerr
•    • Killing Wealth Freeing Wealth
•    • Kleiner Perkins Caufield & Byers
•    • KPCB Greentech Portfolio
•    • Lee Troxler
•    • Obama’s Green Stimulus
•    • President Obama
•    • Smart Grids
•    • U.S. climate legislation
•    • Venture Capitalists
Spread the word

Article Author: Christine Lakatos
Mom, author, blogger –– Fitness Flash, politics, culture, and more; ACE Certified Fitness Trainer since 1980; retired bodybuilder and fitness competitor; and American Gladiator contestant back in 1990. MY DIVA DIET: Fitness Book Series for women of all ages at http://www.MyDivaDiet.com.

Read more: http://blogcritics.org/politics/article/obamas-political-payback-green-corruption-part/page-7/#ixzz0vD7iSp5n
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The Greentech VC Influence Over Washington
By Katie Fehrenbacher Aug. 18, 2010,

There’ve been a couple articles in the past few weeks pointing to President Obama as the “ clean tech investor in chief” and the presidential VC with bets on clean energy. The real trend is that venture capitalists focusing on greentech seem to have had an unprecedented influence on U.S. federal policy and allocations of the stimulus package.

When I attended the Department of Energy’s (DOE) first ARPA-E conference (Advanced Research Projects Agency-Energy) earlier this year in Washington D.C., I was struck by how many venture capitalists were there. I shared a cab back to the airport with some familiar Silicon Valley faces, and was told if your firm didn’t have a dedicated person in Washington — in some circles they call them lobbyists — maneuvering grant and loan programs, you weren’t able to be competitive.

Just look at the figures from the stimulus package (which I am fully in support of): somewhere between $50 billion and $80 billion into clean power and energy efficiency initiatives ( depending on how you slice it). The Obama administration has gone out of its way to seek the advice of green leaning venture capitalists and
entrepreneurs in the Valley on how to spend that colossal amount and what
programs would be the most affective.

Kleiner Perkins managing partner John Doerr is on President Obama’s
Economic Recovery Advisory Board, and was able to convince Vice President Al Gore to join Kleiner, in addition to former Secretary of State Colin Powell. Kleiner’s investments have had some successful government bids, most notably the
$529 million loan to Kleiner portfolio company Fisker Automotive out of the DOE’s
highly competitive Advanced Technology Vehicles Manufacturing, or ATVM, program. Fisker plans to use the loan to build its factory and launch its electric vehicle in 2011.

If you remember, another winner of the $25 billion ATVM program was Tesla Motors, which, as most of us know, was backed by venture capitalists from Draper Fisher Jurvetson, Technology Partners, and Vantage Point among others.

I attended Khosla Venture’s LP meeting earlier this year where the firm
announced that former UK Prime Minister Tony Blair would be joining the firm as Senior Advisor. Several of my journalism peers were comparing the political influence Blair could wield to what Kleiner was doing with Gore. The Obama administration appointed former venture capitalist Jonathan Silver as its loan chief to lead both the DOE’s loan guarantee and ATVM loan programs. About a third of the DOE’s loan guarantee commitments went to venture-backed startups, including thin film solar maker Solyndra and solar mthermal company BrightSource.

I wondered earlier this year if the loan guarantee for Solyndra wasn’t a mistake, given the company has one of the highest manufacturing costs out of its competitors. The company withdrew its IPO plans, citing poor market conditions. The Government Accountability Office also found that the loan guarantee process treated some companies unfairly in their bids and risked “excluding some potential
applicants unnecessarily.”

There’s nothing inherently wrong with venture-backed companies getting government support, and the energy sector needs even more federal funding to create innovation. I support Doerr and Bill Gates’ calls for boosting federal government investing to $16 billion per year into energy innovation.
All I’m saying is that this level of influence should be watched.
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This is how VC’s and DOE Staff work together as reported by one of Tesla Motors senior executives:

In Role as Kingmaker, the Energy Department
Stifles Innovation
By Darryl Siry  December 1, 2009  |  8:30 am

Of all of the Department of Energy programs intended to advance the green agenda while stimulating the economy, the Advanced Technology Vehicle Manufacturing incentive to spur the development of cleaner, greener automobiles is perhaps the most ambitious. But it has a downside.

The energy department has approved direct loans to Nissan, Ford, Tesla Motors and Fisker Automotive totaling about $8 billion out of a budget of $25 billion. The magnitude of this program dwarfs other DOE campaigns like the $2.4 billion given to battery and electric vehicle component manufacturers and the $4 billion disbursed for “smart grid” projects.

To the recipients the support is a vital and welcome boost. But this massive government intervention in private capital markets may have the unintended consequence of stifling innovation by reducing the flow of private capital into ventures that are not anointed by the DOE.To understand this apparent contradiction, you have to look at the market from the perspective of
venture capitalists looking to deploy investors’ capital and startups looking to attract it.

Venture capitalists evaluate a company on the basis of whether they think it will succeed and generate returns for their portfolios. While this evaluation is a function of many things, one key question is how much more capital the company will need to get its product to market or a liquidity event so that the venture capitalist can see a return. The more capital it needs, the more dilutive it will be to the
early investors.

In cleantech, and in particular alternative fuel vehicles, the capital requirements for companies bringing a car to market in significant numbers can be extraordinarily high, reaching into the hundreds of millions of dollars if the company wants to build its own manufacturing facilities. To a venture capitalist, this capital requirement can be daunting. This is why government financing is so attractive. In the case of the
advanced technology manufacturing loans, the DOE steps up for 80 percent of the total amount needed. Private sources fund the other 20 percent. This amounts to free leverage for the venture capitalist’s bet, with no downside. Hedge funds historically used massive leverage to generate outsized returns, but if the trade turns against them, that same leverage multiplies their downside and can lead to financial ruin. In the case of the DOE loans or grants, the upside is multiplied and the downside remains the same since the most the equity investor can lose is the
original investment.

The proposition is so irresistible that any reasonable person would prefer to back a company that has received a DOE loan or grant than a company that has not. It is this distortion of the market for private capital that will have a stifling effect on innovation, as private capital chases fewer deals and companies that do not have government backing have a harder time attracting private capital. This doesn’t mean deals won’t get done outside of the energy department’s umbrella, but it means fewer deals will be done and at worse terms.

According to Earth2Tech, venture capitalist John Doerr commented on this at the GreenBeat conference earlier this month, saying “If we’d been able to foresee the crash of the market we wouldn’t probably have launched a green initiative. Because these ventures really need capital. The only way in which we were lucky I think is that the government stepped in, particularly the Department of Energy. Led by this great administration that put in place these loan guarantees.”
Several sources within startup companies seeking DOE loans or grants have admitted that private fundraising is complicated by investor expectations of government support. None would speak publicly due to the sensitivity of the issue and the ongoing application process.

Aptera Motors has struggled this year to raise money to fund production of the Aptera 2e, its innovative aerodynamic electric 3-wheeler, recently laying off 25 percent of its staff to focus on pursuing a DOE loan. According to a source close to the company, “all of the engineers are working on documentation for the DOE loan. Not on the vehicle itself.” Another highly placed source at Aptera told Wired.com many potential investors wanted to see approval of the DOE loan before
committing to invest.  Startup companies that enjoy DOE support, most notably
Tesla Motors and Fisker Automotive, have an extraordinary advantage over potential competitors since they have secured access to capital on very cheap terms. The magnitude of this advantage puts the DOE in the role of kingmaker with the power to vault a small startup with no product on the market -– as is the case with Fisker — into a potential global player on the back of government financial support.As a result, the vibrant and competitive market for ideas chasing venture capital that has been the engine of innovation for decades in the United States is being subordinated to the judgments and political inclinations of a government bureaucracy that has never before wielded such market power.

A potential solution to this problem may seem counter-intuitive. The best way to avoid market distortion would be for the DOE to cast the net more broadly and provide loans and grants to a large number of companies — which ironically means being less selective. Subject to the existing equity matching requirement, this would allow the private markets to function more effectively in funding a
broader range of companies and driving more innovation. Several innovative companies with great potential have been in the DOE pipeline for many months. Perhaps it is time for the DOE to stop playing favorites and start spreading the love.
Wired.com contacted the Department of Energy for comment but did not receive a reply. Disclosure: Darryl Siry was the chief marketing officer of Tesla Motors from December 2006 until December 2008 and is a special advisor to Coda Automotive, which has not sought an Advanced Technology Vehicle Manufacturing loan.
Photo: Ford Motor Co. Energy Secretary Steven Chu addresses Ford employees on June 23, 2009, after announcing the automaker will receive a $5.9 billion loan.

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http://www.growvc.com/blog/2010/09/venture-capital-conspiracy-theory-in-the-free-world/

Venture Capital Conspiracy Theory In The Free World
by: neil

Wow! Really? No Way! Wow!….this was my reaction to the ‘revelation’ of a post by Michael Arrington’s “So a Blogger Walks Into A Bar…”

This true account of what happens when Tech Crunch’s Mike Arrington walks into a Silicon Valley bar has all the trappings of a gangster movie. For starters, the bar, a group of powerful early stage investors meeting, colluding, plotting against any competition, an agenda on how to control the industry and monopolize and this is NOT a movie! Here is an extract of Mike’s account:

I’ve never seen a more guilty looking group of people. But that alone isn’t that big of a deal. Lively conversations often die quickly when I arrive, and I’ve learned not to take it personally. But I did sniff around a little afterwards, and have spoken to three people who were at that meeting. And that’s where things got interesting.

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. Early on it was mostly to complain about a variety of things. But the conversation has evolved to the point where these super angels are actually colluding (and I don’t use that word lightly) to solve a number of problems, say multiple sources who are part of the group and were at the dinner.

Is there room for price fixing, total control and a greed based structure in the free market world? Is this really best for startups? For entrepreneurs? For Silicon Valley which is a renowned culture known for promoting innovation and talent in startups?

This entire scenario is wrong on so many different levels but knowing this is what can happen within closed doors here are some changes critical to a culture which reflects the values of a entrepreneurial community and a better future for startups:

1. We need transparency. This is very evident from what we’ve just witnessed.

2. Do things in the open and on the record. Why can’t investors, entrepreneurs and other stakeholders work in a transparent environment online where there is automatic accountability and governance through open interactions and a community that can see what’s going on?

3. The system has to benefit all parties involved. Entrepreneurs, investors and others. It needs to be fair and favor innovation. Bring up the best. Mystique, lack of transparency, complex rules are not benefit of anything but greed

4. There is no room for protectionism in a free market. We don’t need early stage capital markets to be exclusive to a select few who control everything. We need to make it more inclusive and involve as many as possible. The more support, the more investors, more and better companies will be born.
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Ron Conway Drops A Nuclear Bomb On The Super Angels [Email]

Ron Conway Drops A Nuclear Bomb On The Super Angels [Email]

Mg Siegler

Thursday, September 23rd, 2010

2 Comments

As we just stated in our previous post, there was clearly an email sent by angel investor Ron Conway to a group of super angels who were likely involved in the Bin 38 “AngelGate” meeting that Mike stumbled into a couple days ago. We’ve now received a copy of the email that Conway sent from an anonymous tipster. And we’ve confirmed it is authentic from one of the recipients.

It’s a bombshell. No, it’s a nuclear bomb. It speaks for itself. Read it below.

Subject: Super Angels Gathering

I want to share my views on the two gatherings you had in June and this week and what they represent in my opinion.

So that I would not be influenced by any outside inputs I am writing this without sharing my thoughts with anyone including David Lee and the other SV Angel Partners.

I want to clarify once and for all my total disagreement with your values and motives for being investors.

I have stated consistently for year that I invest because I love helping entrepenuers and watching them learn and succeed.

I am honored that entrepenuers share their crystal ball views of the future of innovation and technology with us and respect the guts it takes to start a company.

At SV Angel we try to reciprocate by adding value any way we can.

I think that actions speak louder than words and SV Angel has always been a friend of entrepenuers and we focus our business to help entrepenuers achieve success.

The world of startups would be a better place if you spent less time complaining about deal structures, terms, vc’s, and valuations etc and the cars you drive, and just helped entrepenuers build their companies.

The Free Enterprise system is very efficient …..why not let the marketplace demands decide on these issues, its worked for many many years. These startups are binary …they succeed or fail so why waste time on deal structures, terms, vc’s, and valuations etc and just help entrepenuers build their companies.

In my opinion your motives are driven by self serving factors around ego satisfaction and “making a buck”.

My motives and values are very different.

They are so different I want to be up front with you and recognize this and disengage from any involvement with you. I will not be a hypocrite.

I am tired of seeing you and engaging in idle chit chat and not sharing my true feelings.

I think you have a different value set and lets agree to disagree and not have to even engage in any idle chit chat or discussion of any sort….ever.

Furhermore, I regret David Lee was involved in the gatherings. I am sure he does too.

We talked about the first dinner and I encouraged him to write the email above and withdraw….I know he was uncomfortable with both gatherings….where no one was there to speak up for the interests of the entrepenuers.

By now you are rolling your eyes and saying “Ron’s a ___________(fill in the blank) ….and who is he to pass judgement…..

We are all entitled to our opinions.

I am just being honest and transparent….the way most of the entrepenuers I invest are…

I wish the Angel community could have the same integrity and values of the entrepenuer community, but unfortunately I now believe that is hopeless and your actions prove that.

What do you think the entrepenuers you have funded are thinking right now.

This is despicable and embarrassing for the tech community in my opinion.

Can you learn from this ?

Please keep this confidential even though I know that will be hard since two of you let your egos take over and show Arrington how important you are by telling him you were headed to a “secret” angel gathering.

Dave McCLure…pls try not to blog about this and cause silicon valley more embarrassment with your unprofessional classless writings

Note: I did not include those who were at the gatherings who I don’t know well enough to form an opinion around their motives or values.

Tags: angelgate, Ron Conway

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Mnaficy> David Hornik•2 years ago−

David,

Sorry to disagree, but from an entrepreneur’s perspective collusion is alive and well among VCs. If you’re ever interested, I can give you the names of VCs who colluded to try to bring down the valuation of my first company. Several witnesses to this event, including a very well known lawyer in the valley.

— Mariam Naficy, CEO & Founder, Minted.com
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From Wikipedia: Collusion> Bruno Morency•2 years ago−

Collusion is an agreement between two or more persons, sometimes illegal and therefore secretive, to limit open competition by deceiving, misleading, or defrauding others of their legal rights, or to obtain an objective forbidden by law typically by defrauding or gaining an unfair advantage.[citation needed] It is an agreement among firms to divide the market, set prices, or limit production.[1] It can involve “wage fixing, kickbacks, or misrepresenting the independence of the relationship between the colluding parties”.[2] In legal terms, all acts effected by collusion are considered void.[

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peter_voland@yahoo.com> Dave McClure•a month ago−

I have a company that could not get any funding and we have been hurt exactly by such nepotistic and jerk style actions. The valley is now the NEW VERSAILLES of crony investment INCEST where you get the money most likley if you have buddies in such f***** circles. Otherwise, they will invest in ANY CRAP without merit as long as they have a BUDDY there. This is DETRIMENTAL to innovation and fair level plane for EVERYONE and all they do is CROSS deal and NOT invest in the best company according to the tech/ideas merits. collusion, nepotistic crony based intellectual incest. This SUCKS. I could give tangible examples where 2 SAME companies get once 8million(just cos crony buddies despite doing inferior job) and another gets nothing despite doing superb job.

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On Self Importance:

AngelGate: Chris Sacca Responds To Ron Conway

AngelGate: Chris Sacca Responds To Ron Conway

Michael Arrington

Sunday, September 26th, 2010

As I said the other day, there would be more private emails getting published. This one is from Chris Sacca, a prominent “super angel” who was not at the meeting I stumbled into but was at a previous meeting. He wrote a response to the Ron Conway email. It’s worth pointing out that this email is time stamped a good half hour before our story broke, meaning he wrote it thinking it would all still stay private.

This is also the first leaked email we’ve received that actually includes names in the header of some of the people who are involved in this mess. Presumably these were the people Ron Conway emailed, but the header was stripped out of that email when we received it. Like the Ron Conway email, we have separately confirmed this email is authentic, although Sacca will not comment on it.

I’ve removed one sentence from the email that was highly sensitive. Nothing that material to the overall message, but it was very personal and not appropriate to print publicly.

The email:

From: Christopher Sacca
Date: Thu, Sep 23, 2010 at 7:05 PM
Subject: Re: Super Angels Gathering
To: Ron Conway
Cc: Josh Kopelman, Steve Anderson, Jeff Clavier, Mike Maples, Dave McClure, David Lee

Ron,

I agree with you that we all owe it to each other to be candid.

In that spirit, I will say that I will always be grateful for the opportunities you have given me in this business. You have shared deals with me, introduced me to colleagues, and invited me to events for years. Your philanthropy knows no bounds and has definitely inspired my work with charity:water and Livestrong. In fact, I have great respect for how you took my introducing you to will.i.am as an opportunity to become the single most important benefactor to his foundation. As I wrote last year before the Crunchies when I endorsed you for Angel of the Year:

I mention Ron last only because this one gets a little emotional for me. It goes without saying, his prolific reach is legendary. He is the Zelig of the startup world in that there isn’t a liquidity event in our industry in which he isn’t involved and a closing dinner to which he isn’t invited. Of course, he isn’t just invited as an investor, but usually as the guy who made the introduction, helped negotiate the terms, and saved it from the brink of disaster along the way. It gets emotional for me because no one in this business has been more generous, more selfless, or more caring with me. We all learn from Ron, and none of us could be here without him. I will never understand how he covers so much ground and how he manages to be so responsive and perform so much service for others. When you are with Ron, you know he will go to any length to help you. When guys with his success might otherwise take time to rest, Ron then redoubles his efforts for his charitable causes, not just giving money, but raising funds and awareness and doing hard work on non-profit boards. I feel lucky to know Ron and to have the chance to work with him virtually every day as I am sure many of you do too.

That said, I am having a hard time resolving the person I quite literally grew up with in this business, with the person who sent the email to which I am replying. Your anger and personal accusations hurt, and it is clear they are intended to.

I wasn’t in town for the second meeting, but I went to the first dinner. I wish you would’ve been there. Not only would your input have been valuable, but if you had attended, you would have seen firsthand these topics of discussion:

1) Standard docs to make financings cheaper for startups. The group talked about who would be willing to pitch in our own money and time to help draft a set of financing documents that would allow for priced rounds to cost the same as convertible notes. As you know, it usually costs 10-15 thousand dollars more to sell stock than issue a note. Entrepreneurs would directly benefit from that work by lower costs and less bullshit legal process to get a financing done. In fact, it is exactly what YCombinator did in building a model convertible note. I am sure you agree that would be a good thing for founders everywhere if we were able to publish docs like this to the public to be used as open source.

2) Pro-rata rights. At the first dinner, we heard, from guys who have been doing this for a long time, about the importance of securing pro-rata rights for future rounds. This would allow them to continue to invest alongside other investors at the new, higher, market price in future rounds. I have no doubt you would agree that entrepreneurs also benefit from having their early investors continue to stay involved and demonstrate their renewed commitment to the company. I know you would also love to be able to continue to invest in companies beyond their seed round, and you also know this is only ever helpful to your founders.

3) The futility of VCs blocking company sales. We also discussed how pointless it was for VCs to put clauses in deals that would prevent companies from selling and how the guys in the room had never invoked such a clause because doing so would create misalignment with their founders. We identified that as one way in which many traditional VCs were just missing the boat as to how to work with founders as peers and collaborators and not put them on the opposite side of the table. Each of us felt better knowing we weren’t alone in pushing back on this term that very directly harms founders.

4) Earliest stage founder cash-outs. Among efforts from others, we talked about my recent projects to get very early stage founders some liquidity. Traditional VCs have rarely been inclined to give founders any ability to cash out claiming it makes them less “hungry”. As someone who, just five years ago, had net worth of exactly zero dollars, I remember the difference between being “panicked” and “hungry”. As I have invested in more and more companies, I have learned that many founders would benefit dramatically from even the smallest amounts of cash (compared to the overall deal size). I have worked hard to get my founders as little as $25,000 to pay off credit cards and student loans. Or, in a small deal that closed this week, I was able to get a founder the money so he can pay for his wedding and not have to worry about taking on debt. I, and the other investors in this group who do the same thing, feel good about helping our founders in this way.

I hope you can really pause to consider who is on this list you mailed, as well as the others in the room you didn’t, and the way they do business. All of us have considered you a mentor along the way, and you have recognized that by collaboration with each of us. Inspired by your service, we have seen each of our firms evolve to continually try to always put founders first. Guys like Kopelman are so painfully pro-entrepreneur, and so service-oriented to the community of founders, one topic of discussion at our dinner was understanding all of the different founder perks on which he has spent his fund’s money. From the venture concierge and his hiring services, to his CRM software and CEO summits, I haven’t seen anyone add as much value to founders as First Round. I wish you could have been there to experience firsthand the discussion about how the rest of us could emulate more and more of that model. And, like typical Josh, he was certainly willing to teach us his best practices. I was so blown away, that I actually asked FR to lead a deal I sourced recently because I knew they could serve the company better than I could.

I know that each of the guys on this list coaches entrepreneurs they aren’t even invested with and continue to take time to help the entire startup ecosystem. They work to get founders access to early betas that they know will help. They call in favors to get costs down. They spend political capital to bring in the best hires and they lose sleep brainstorming how to solve problems. Each of the guys here takes phone calls and sends emails at all hours of the day and night. Everyone here hustles. Frankly, I find it hard to keep up with them, just like I can’t keep up with you.

I told you last night that I think some of this issue is worth discussing, even on stage. But, this message, and the ferocity and ad hominem attacks that you include, hurt. Both what you wrote to me before (calling this group “dirtbags”) and in this message above. I am not sure why it needed to get personal. In sharp contrast to your stereotyping about what you say is obsession with talking about cars, I actually drive a piece of shit truck with 115k miles, despite having been frequently encouraged to visit Franz to buy a Mercedes. I fly coach and I stay on friends’ couches in NYC and LA, not out of Signature Aviation and at the Peninsula. That said, though I haven’t yet made a buck, I sincerely hope I will. As I post clearly on my website:

“We don’t think of ourselves as money managers. That isn’t to say we aren’t tireless and competitive. In fact, we are ruthless negotiators, aggressive businesspeople, and have no allergy to disproportionately large returns. However, frankly, capital just isn’t that important to the early triumph of a company anymore.”

My founders will tell you, as will the founders of everyone listed here, that I/we sweat with these guys just like you do, bleed with them just like you do, and try as hard as we can to put their interests first. My founders stay at my house for team retreats. In fact, I just bought an entirely new place for them to be able to come to the woods, exercise, relax, focus, unwind, and bond with each other. That came out of my pocket. They get overweight? I buy them a mountain bike. They look skinny? I pick up groceries. Just talk to them and I am sure you will see that, though each of us investors adds value to our founders’ lives in different ways, everyone on this thread adds value, Ron. Everyone. To claim that SV Angel has a monopoly on adding value is disingenuous.

When I started angel investing, my first deal was paid for with a credit card check. It was a dumb idea, but I was so drawn to the notion that I could be helpful to the team and I relished the chance to be building something again. You and I were in that deal together and we both made out pretty well. As you know, at Google, I didn’t get rich by Silicon Valley standards. I left there worth less than a million dollars. I started doing angel investing in part because you and others like Coach Campbell encouraged me to and you knew I would be good at it. I wrote checks to companies when it was financially irresponsible for me to do so, then I went in there and busted my ass to make those things succeed. My days have been driven by a passion that makes it impossible for me to avoid the opportunity to help. Right now, 94% of my net worth is tied up in startups and I [REMOVED BY TECHCRUNCH]. I have every shred of my money alongside my founders, often buying their same common stock. No one but an obsessive idiot would ever allocate their money that way. But, I love what I do. And I know that goes for everyone on this list.

Kopelman bids his kids farewell every few weeks to fly the redeye here and back to be with his companies. I have watched Maples, Clavier, and Steve all drop what they are doing to be supremely helpful to their founders and to their peers. Each of them shares opportunities and leverages their network to try to offer the best possible service to their companies’ teams. Sure, McClure is loud and swears like a drunken sailor, but he takes bullets for his guys, and his service to entrepreneurs through Geeks on a Plane and his Startup 2 Startup dinners series is unparalleled. His followings among founders make that clear. They love and respect him, no matter how you may judge his writing style. They know they have an ally in Dave.

I have seen guys on this list, and in the larger group of all dinner attendees, repeatedly back off terms or convince other investors to take haircuts alongside them so deals can get done. Ask any single one of the companies who has met with me and they’ll tell you that I always negotiate against myself. To a fault. I have given back shares to make room for hiring and I have talked other angels into waiving any fiduciary arguments so our teams could stretch a small deal farther. Everyone here has done that knowing we will get to work with those entrepreneurs again in better times.

This group of guys could all take a much easier path if they were just out to make a buck. Everyone here could raise megafunds, bilk them for fees, jam too much money into deals and repeat that process all over again just mooching off the system. Instead, the folks you listed are all your fellow pioneers in a new way of doing business, a way that admits the structural change the industry has undergone. This is a different era, and each of these guys knows that means greater accountability than ever before.

I described on my Lowercase site characteristics that I think apply to everyone on this thread, and especially you, Ron:

We dive in to work with teams that obsess over user experiences, customer happiness, and that, to quote Paul Graham, “make something people want.” Along with relatively small amounts of money, we give them the time, attention, and the empathy that catalyze winning outcomes for all involved. Rolling up our sleeves, we help design front pages, invent new services, prioritize product features, negotiate partnerships, and deal with the everyday professional and personal challenges of startup life. We are grateful for the companies who have chosen us, and feel lucky for the chance to collaborate with such brilliant minds. The dealflow that comes to us is flattering, and we are beyond thankful for the other individuals and firms with whom we partner and learn from along the way.

It makes me sad to hear you don’t think that is actually the case, because I actually don’t doubt for a second that the guys on this list all exceed the standard above. You know they do. You have worked alongside them for years. You have broken bread with them. You know who these people are and you know what their values are. You have referred deals to all of them because you know the positive impact they have on this industry. Now you are willing to throw that away over second-hand accounts of what transpired at a dinner you didn’t attend. I think you owe this group more than that. I also think you owe the press and the founders who are reading the accounts you have prompted more than that.

Ron, we live in the age of Twitter. If we ever fucked an entrepreneur, or if an entrepreneur even hinted we had fucked them, it would be broadcast immediately and the resulting blog posts would be permanently attached to a search on our names. Founders have never been better educated or more empowered than they are today. We aren’t giving them money; they are giving us the right to invest in their companies. Our founders hire us and they do so after consulting a rich network of datapoints confirming whether we are or are not helpful. Slackers don’t get deal flow. Jerks don’t get deal flow. Poseurs get left aside. Abuse the system once and you are tattooed with shame.

Entrepreneurs outnumber us and they talk more than we do. The good opportunities are more than any of us can handle. There are legions of investors at the gates hucking checks at today’s founders. The only possible way any of us can stay in business is by serving. If we are not demonstrably and materially helpful to entrepreneurs, we are dead.

Pausing now to look back and re-read what you wrote, it just makes me sad and your rush to judgment of people you called your friends is disappointing. All of this goodwill burned with guys you have loved. All of this time spent on an issue when we should be helping our companies. (I am writing to you when I should be calling a founder to help him weigh the demands of his VCs and a potential acquirer.) All of this anger directed at people with whom you didn’t even have a discussion to understand what was or wasn’t going on. I wish you had been at those dinners. First, I am sure you would have had helpful input. But, more importantly,you would have instead seen your peers working, as they have always done, to cut through the bullshit in this industry and continue to restore the purity and honor a decade of misaligned interests has left here.

I hope you will find some time over the next couple of days to chew on all this, some time to reflect on who we all are and what we all do. I hope you will spend a little time with our founders and ask them how they feel about working with all of us. I hope you will work to clear the air about what did or didn’t happen. You have such an important voice. But, with that voice comes the responsibility to investigate, know, and share the whole truth.

All told, I know that the gratitude that this group has for your work in this business can’t be undone with one vitriolic email. So, I am optimistic that after you have a chance to chat with each of us, you will remember the passion and selflessness that underpin the work all of us do. While I deeply believe none of us could have gotten here without you, I also ask that you respect that we have all worked our asses off to be here. We all care, we all help, and we all serve. We all learned much of that from you.

I hope in time that will be clear once again and we can all get back to helping our founders and each other.

Thank you,

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fellowship
http://37signals.com/svn/posts/1927-the-next-generation-bends-over

The next generation bends over

Jason Fried wrote this on Sep 18 2009

Mint’s sale to Intuit really pissed me off.

Why should I care? Because I think it’s indicative of a VC-induced cancer that’s infecting our industry and killing off the next generation. I don’t know the full backstory, but I’d bet this sale was encouraged by a Mint investor.

Here’s a fresh new company that was gunning for an aging incumbent. And not only gunning, but gaining. They had a great product, great design, and great potential. They were growing rapidly and figured out the revenue game. They were on their way to redefining an industry — one that was left for dead by the current custodians.

They were everything their main competitor, Intuit, was not. While Mint was inventing, Intuit was out of it. People used Quickbooks/Quicken out of habit and legacy. People used Mint because they loved it. Intuit was disgruntled, Mint was disruptive.

But here’s what happened: Intuit, last decade’s leader in personal finance, just became the next decade’s leader in personal finance. Mint had their number, but they sold it for $170 million. A big payday for sure, and if that was their two-year goal then they nailed it, but I can’t believe that was the point behind Mint. It had too much potential.

Mint was a key leader of the next generation of game changers. And now it’s property of Intuit — the poster-child for the last generation. What a loss. Is that the best the next generation can do? Become part of the old generation? How about kicking the shit out of the old guys? What ever happened to that?

As more great new companies are absorbed into big old companies, a whole new generation of change is lost. They can issue press releases saying how excited they are to be able to bring their product to a whole new world of customers, and how their new suitor will bring enormous resources to bear, but we know that’s usually not really what happens. Development slows, products stall, the staff that built the great stuff leaves, and mediocrity creeps in. Not always, but usually.

Thomas Jefferson said “Periodic revolution, ‘at least once every 20 years,’ was ‘a medicine necessary for the sound health of government.’” That may be even truer for business. We need new blood, new companies, new methods, new ideas, new applications, and new leaders to regenerate stale industries. The old must be plowed under by the new.

But today it seems like the old is doing the plowing. Let’s stop that. Let’s build great companies that are here to fight, here to win, and here to stay until the next generation after us comes along and kicks all our asses. And again and again and again. That’s how better happens.

Jason Fried wrote this on Sep 18 2009 There are 186 comments.

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Jason Fried wrote this on Sep 18 2009/ 186 comments

Mint’s sale to Intuit really pissed me off.

Why should I care? Because I think it’s indicative of a VC-induced cancer that’s infecting our industry and killing off the next generation. I don’t know the full backstory, but I’d bet this sale was encouraged by a Mint investor.

Here’s a fresh new company that was gunning for an aging incumbent. And not only gunning, but gaining. They had a great product, great design, and great potential. They were growing rapidly and figured out the revenue game. They were on their way to redefining an industry — one that was left for dead by the current custodians.

They were everything their main competitor, Intuit, was not. While Mint was inventing, Intuit was out of it. People used Quickbooks/Quicken out of habit and legacy. People used Mint because they loved it. Intuit was disgruntled, Mint was disruptive.

But here’s what happened: Intuit, last decade’s leader in personal finance, just became the next decade’s leader in personal finance. Mint had their number, but they sold it for $170 million. A big payday for sure, and if that was their two-year goal then they nailed it, but I can’t believe that was the point behind Mint. It had too much potential.

Mint was a key leader of the next generation of game changers. And now it’s property of Intuit — the poster-child for the last generation. What a loss. Is that the best the next generation can do? Become part of the old generation? How about kicking the shit out of the old guys? What ever happened to that?

As more great new companies are absorbed into big old companies, a whole new generation of change is lost. They can issue press releases saying how excited they are to be able to bring their product to a whole new world of customers, and how their new suitor will bring enormous resources to bear, but we know that’s usually not really what happens. Development slows, products stall, the staff that built the great stuff leaves, and mediocrity creeps in. Not always, but usually.

Thomas Jefferson said “Periodic revolution, ‘at least once every 20 years,’ was ‘a medicine necessary for the sound health of government.’” That may be even truer for business. We need new blood, new companies, new methods, new ideas, new applications, and new leaders to regenerate stale industries. The old must be plowed under by the new.

But today it seems like the old is doing the plowing. Let’s stop that. Let’s build great companies that are here to fight, here to win, and here to stay until the next generation after us comes along and kicks all our asses. And again and again and again. That’s how better happens.

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…Group Premiers Documentary Film About Secret Lives of Venture Capitalists

The film was sponsored by the new book “Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist” written by Feld and Mendelson. Nice… now I know what Arrogant Bastard Ale feels like coming out my nose!
foundrygroup.com/wp/2011/09/imavc/

Arrogant, Self-Absorbed Capitalists

Capitalism and elitism have always shared a kinship, but once upon a time our arrogant capitalists were at least smart enough to keep their disdain for the Madison-Avenue-guided commoners safely behind the boardroom doors. Now, they want to sneer at you, even as you’re buying their wares.
patheos.com/blogs/theanchoress/2010/09/27/those-arr…

FI.co: This Entrepreneur Publicly Spanked America’s Most Arrogant VCs.

In 2009, the Founder Institute was born. Below, a portion of This Entrepreneur Publicly Spanked America’s Most Arrogant VCs… “Once The Funded was firmly established and effectively keeping venture capitalists (relatively) in check, Adeo turned his attention toward educating emerging…
fi.co/posts/1333

…Rebuffs LG and Mitsubishi, Eyes State-Owned Lithium Ion Battery Venture

And why do they want to buy only lithium carbonate from us? With nobody interested in sourcing battery production to Bolivia, Morales has recently stated that his country will attempt to build its own industry from the Even a democratic country if it has most needed resource will become arrogant.
hybridcars.com/bolivia-pledges-start-state-owned-lithi…
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GUARDIAN_LOGO

Brainwashed by the cult of the super-rich

Champagne

‘We are invited to deceive ourselves into believing we are playing for the same stakes while worshipping the same ideals, a process labelled ­’aspiration’.’ Photograph: Alamy

Last week, Tory MP Esther McVey, Iain Duncan Smith’s deputy, insisted it was “right” that half a million Britons be dependent on food banks in “tough times”. Around the same time, the motor racing heiress Tamara Ecclestone totted up a champagne bill of £30,000 in one evening. A rich teenager in Texas has just got away with probation for drunkenly running over and killing four people because his lawyers argued successfully that he suffered from “affluenza”, which rendered him unable to handle a car responsibly. What we’ve been realising for some time now is that, for all the team sport rhetoric, only two sides are really at play in Britain and beyond: Team Super-Rich and Team Everyone Else.

The rich are not merely different: they’ve become a cult which drafts us as members. We are invited to deceive ourselves into believing we are playing for the same stakes while worshipping the same ideals, a process labelled “aspiration”. Reaching its zenith at this time of year, our participation in cult rituals – buy, consume, accumulate beyond need – helps mute our criticism and diffuse anger at systemic exploitation. That’s why we buy into the notion that a £20 Zara necklace worn by the Duchess of Cambridge on a designer gown costing thousands of pounds is evidence that she is like us. We hear that the monarch begrudges police officers who guard her family and her palaces a handful of cashew nuts and interpret it as eccentricity rather than an apt metaphor for the Dickensian meanness of spirit that underlies the selective concentration of wealth. The adulation of royalty is not a harmless anachronism; it is calculated totem worship that only entrenches the bizarre notion that some people are rich simply because they are more deserving but somehow they are still just like us.

Cults rely on spectacles of opulence intended to stoke an obsessive veneration for riches. The Rich Kids of Instagram who showed us what the “unapologetically uber-rich” can do because they have “more money than you” will find further fame in a novel and a reality show. Beyond the sumptuous lifestyle spreads in glossies or the gift-strewn shop windows at Harrods and Selfridges, and Gwyneth Paltrow’s Goop website, shows like Downton Abbey keep us in thrall to the idea of moolah, mansions and autocratic power. They help us forget that wealthy British landowners, including the Queen, get millions of pounds in farming subsidies while the rest of us take back to the modest homes, which we probably don’t own, lower salaries and slashed pensions. Transfixed by courtroom dramas involving people who can spend a small family’s living income on flower arrangements, we don’t ask why inherited wealth is rewarded by more revenue but tough manual labour or care work by low wages.

Cue the predictable charge of “class envy” or what Boris Johnson dismisses as “bashing or moaning or preaching or bitching“. Issued by its high priests, this brand of condemnation is integral to the cult of the rich. We must repeat the mantra that the greed of a few means prosperity for all. Those who stick to writ and offer humble thanks to the acquisitive are contradictorily assured by mansion-dwellers that money does not buy happiness and that electric blankets can replace central heating. Enter “austerity chic” wherein celebrity footballers are hailed for the odd Poundland foray, millionaire property pundits teach us how to “make do” with handmade home projects and celebrity chefs demonstrate how to “save” on ingredients – after we’ve purchased their money-spinning books, of course.

Cultish thinking means that the stupendously rich who throw small slivers of their fortunes at charity, or merely grace lavish fundraisers – like Prince William’s Winter Whites gala for the homeless at his taxpayer-funded Kensington Palace home – with their presence, become instant saints. The poor and the less well-off, subject to austerity and exploitation, their “excesses” constantly policed and criminalised, are turned into objects of patronage, grateful canvasses against which the generosity of wealth can be stirringly displayed. The cult of the rich propounds the idea that vast economic inequalities are both natural and just: the winner who takes most is, like any cult hero, just more intelligent and deserving, even when inherited affluence gives them a head start.

We are mildly baffled rather than galvanised into righteous indignation when told that the rich are being persecuted – bullied for taxes and lynched for bonuses. The demonising of the poor is the flip side of the cult of the rich or, as a friend puts it, together they comprise the yin and yang of maintaining a dismal status quo. It is time to change it through reality checks, not reality shows.

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Glenn Greenwald and team are seeking top reporters and researchers for the new venture. Contact the usual suspects if you are qualified or:
info@omidyargroup.com

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White, male startup companies get funding for being white and male …

Feb 10, 2010 … When top technology venture capitalist John Doerr decides which … there are people that look like you that did great evil–no matter what color …

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*michael parekh on IT*: ON JOHN DOERR‘S CLARION CRY AT …

Mar 8, 2007 … MAKE IT SO John Doerr made one of the most emotional presentations on the need for “Going Green” just now, kicking off the second day of …

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Silicon Valley Is a Big Ole Fraternity – The Wire

27 Apr 2012 … Well, creating bros only takes a certain environment that both Silicon Valley and college fraternity houses share. Bro-dom is not about IQ or …

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Brogramming: The disturbing rise of frat culture in Silicon Valley

30 Apr 2012 … A new generation of programmers is fostering a culture that’s more Animal House than Revenge of the Nerds — and that’s not necessarily a …

http://www.theweek.com/ article/ index/ 227356/ brogramming-the-disturbing-rise-of-frat-culture-in-siliconvalleyView by Ixquick ProxyHighlight

Katherine Losse, the Woman in the Facebook Frat House – WSJ.com

22 Jun 2012 … Memoirs of Mark Zuckerberg, Sheryl Sandberg and others from the raucous days of a company in transition from dorm room to Silicon Valley …

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Brogrammers wanted: Kixeye’s hiring strategy caters to male fantasies.

2 Aug 2012 … Kixeye, the gaming startup that proves Silicon Valley‘s frathouse culture isn’t going away anytime soon. By Will Oremus. Brogrammer on …

http://www.slate.com/ articles/ technology/ technology/ 2012/ 08/ brogrammers_wanted_kixeye_s_hiring_strategy_caters_to_male_fantasies_ .htmlView by Ixquick ProxyHighlight

“Gangbang Interviews” and “Bikini Shots”: Silicon Valley‘s …

26 Apr 2012 … For startups like Path, recasting geek identity with a frat house … for social-media analytics company Klout: The high-flying Silicon Valley startup …

http://www.motherjones.com/ media/ 2012/ 04/ siliconvalley-brogrammer-culture-sexist-sxswView by Ixquick ProxyHighlight

Brogrammers Bring FratHouse Ethos to Geek World of Coding …

2 Mar 2012… that prevailed when semiconductors ruled Silicon Valley. … A portmanteau of the frathouse moniker “bro” and “programmer,” the term has …

http://www.bloomberg.com/ news/ 2012-03-02/ brogrammers-bring-frathouse-ethos-to-engineers-geeky-coding-world-te ch.htmlView by Ixquick ProxyHighlight

Michael Arrington, Jenn Allen, and the Dark Side of the Information …

Dec 1, 2013 … Now he’s on the defensive, denying accusations that he raped an ex-girlfriend … Speakers are a Who’s Who of Silicon Valley and in recent years have … past his prime and the untucked style of a frat-house social chairman.

http://www.vanityfair.com/ business/ 2013/ 12/ michael-arrington-jenn-allen-relationshipView by Ixquick ProxyHighlight

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Journey to the (Revolutionary, Evil-Hating, Cash-Crazy, and Possibly Self-Destructive) Center of Google

You’ve heard the story. Larry and Sergey drop out of school, start a company in a garage, then become billionaires. But will Larry and Sergey ever grow up?

It’s August 19, Going Public Day for Google, and Larry Page and his comrades are eyeing the lavish breakfast laid out before them at the NASDAQ building: poached eggs perched on tiny pedestals, piles of canapés, pots of crème fraîche. In a few minutes, Larry will preside over the ceremonial opening of the market, then he’ll troop up the street to Morgan Stanley to watch Google’s stock start trading. At 31, Larry is about to cross the threshold into bona fide billionairehood. So you’d think he’d be as high as Courtney Love right now—but he doesn’t really look it. Buttoned up in a suit from Macy’s, strangled by a stiff white collar, he isn’t eating, isn’t schmoozing, and is only rarely smiling. Maybe it’s the absence of Sergey Brin, his fellow Google founder, who has chosen this morning, unaccountably, to stay back in Silicon Valley. Or maybe he’s just exhausted. But even when his elders approach and kiss his ass, Larry’s at a loss for words.

“Congratulations, congratulations,” says NASDAQ president Robert Greifeld. “This offering is great for all of us. Great for Google, great for the NASDAQ. It’s going to be a great success!”

Larry mumbles, “It will be interesting to see what happens.”

A few feet away, Google’s CEO, Eric Schmidt, is chatting with John Doerr, one of the company’s venture-capital investors and a member of its board. At 49 and 53, respectively, they are senior members of the Silicon Valley patriarchy. Schmidt is the former CEO of the software firm Novell and, before that, was a longtime executive at Sun Microsystems. Doerr, the marquee partner in the VC firm Kleiner Perkins Caufield & Byers, is the financier who bankrolled Netscape, Amazon.com, Compaq, and Sun. Between them, Schmidt and Doerr have spent more than fifty years in the Valley. But as both will attest, they have never encountered a pair of founders quite like Larry and Sergey—or an IPO quite like this one.

What started out at the founders’ instigation as a grand experiment in popular capitalism has turned into what this morning’s Wall Street Journal described as “a rather messy affair.” There have been inquiries by the Securities and Exchange Commission, acid criticism in the media, and investor skittishness about the price of the stock and about the auction by which it’s being sold. (And let us not forget the pièce d’incompetence: a Playboy interview with Larry and Sergey that came out during the SEC-mandated “quiet period” and made the Google PR team look like a bunch of, well, boobs.)

So while Schmidt and Doerr must surely be taking comfort in the fact that they’re about to make a bundle, they must also be praying silently that nothing else goes wrong. Suddenly, there’s a flurry of activity, a scurrying of factotums. Two pretty young women in short black skirts cry out for sparkling water and napkins. Schmidt and Doerr glance around the room, finally clocking the cause of the commotion: Larry has planted his billion-dollar butt in a plateful of crème fraîche.

As the young ladies gamely dab his bottom, trying to rid him of his stain, Larry stands stiffly, his face the color of claret. Schmidt turns to me and rolls his eyes. “These things happen,” he says. “We’ve seen worse.”

The rise of Google is a tale often told as a Silicon Valley classic. Two precocious Stanford grad-student nerds swept up in the fever of the Internet boom invent technology that profoundly changes the experience of the Web; they drop out and start a company (in a garage) that achieves iconic status; they stage a historic public offering, achieving vast wealth and fame.

This version of events is accurate in all its particulars. If anything, it understates the case. Arguably the most important technology company to emerge in two decades, Google is as ubiquitous as the Internet itself. By the end of 2004, the controversies that plagued its IPO were long forgotten. Its stock was trading at around $190—more than double the offering price—and Larry and Sergey were worth approximately $7 billion each. They’d even made it onto Barbara Walters’s list of the year’s “Most Fascinating People.”

But beneath these familiar surface details, the Google story is more nuanced and compelling. It’s a story about the clash between youth and experience, more a messy ensemble drama than a simple buddy flick—one whose main characters have persistently deviated from any script, resulting in unexpected twists and turns that haven’t come to light until now.

Through boom and bust, the prevailing plotline in Silicon Valley has revolved around fathers and sons. And despite the caricature of the Valley as a realm where the latter are constantly cudgeling the former, the relationship has often been more traditional than outsiders assume.

Like every other precinct of the business world, the Valley has long been in thrall to the Serious American Executive, the seasoned CEO, valued for his maturity and credibility with Wall Street. At the height of the dot-com bubble especially, the importing of bosses with top-heavy CVs became the fashion in the Valley, even as the image of the place was centered on its pizza-munching, Rollerblading tyros. At Netscape, Yahoo, eBay, and many other start-ups, twentysomething founders were soon reporting to executives old enough to be their parents. Netscape phenom Marc Andreessen had CEO Jim Barksdale. Yahoo’s Jerry Yang and David Filo first had CEO Tim Koogle and later Terry Semel. Frequently, these executives had no experience in technology. They were typically, however patronizingly, referred to as the “adult supervision,” and their job was to engender a semblance of corporate sanity and discipline—in other words, to keep the kids in line. Their presence also highlighted where the real power in the Valley rested: with the venture capitalists who had installed them in the first place.

Larry Page and Sergey Brin are, in Silicon Valley terms, of a different generation than Andreessen, Yang, and Filo. Which is to say, they started their company four years later. By then the pair had determined they had no use for many of the Valley’s customs. At every stage in their quest to build what Larry describes as “not a conventional company,” they have ignored the adamant advice of Google’s designated grown-ups. They’ve accepted a middle-aged CEO but denied him full authority. They’ve displayed indifference, even contempt, for Wall Street, their stockholders, and the press.

And while the Google IPO provided some of the most vivid scenes so far in the company’s patricidal drama, those tense enactments weren’t the first, and they won’t be the last. Michael Moritz, the other venture capitalist behind Google, once told me, “Most people think that IPOs are the climax of a company’s story, but in fact they’re just the first chapter.” He went on to say that a company’s genetic code gets set in its first eighteen months. “After that,” he said, “companies are impossible to change; their cultures are hardwired in. If the DNA is right, you’re golden. If not, you’re screwed.”

In January 1996, Larry, a reticent midwesterner who had gained renown in college by building an ink-jet printer out of LEGOs, and Sergey, a Muscovite by birth and an amateur trapeze artist, started working together on technology to search the Internet. At the time, most search engines based their results on the number of times a search-for term appeared on a given Web site. Larry and Sergey, both in the midst of pursuing their Ph.D.’s in computer science, surmised that it would be better to base searches on relevance; they believed popularity mattered—that the more often a site was linked to, the more relevant it was likely to be. Using complex algorithms, they devised a system they called Page-Rank, after Larry, and they put it at the heart of their search engine, first dubbed BackRub and soon thereafter, Google.

Within two years, Google was the rage among the online cognoscenti, and Larry and Sergey were toying with the idea of starting a company. In August 1998, on a porch in Palo Alto, they delivered a demo to Sun cofounder Andy Bechtolsheim, a legend in the Valley for his engineering prowess and his nose for talent. He took one look at the demo and ambled off toward his car, then came back with a $100,000 check made out to Google, Inc.

In Bechtolsheim, Larry and Sergey had found their first big brother. In short order, they found several others, from whom they collected $1 million in seed money. But Larry and Sergey knew that a million bucks wouldn’t last long in the boom-era Valley, so they made their way up to Sand Hill Road, where the Valley’s venture capitalists cluster in a kind of multimillionaires’ ghetto.

For the most part, Sand Hill Road proved inhospitable to Google. The VCs didn’t think search was a promising business; the field was already crowded, the leaders (Yahoo and Excite) firmly entrenched. The VCs also recoiled from the price tag on the deal, which valued Google at a brisk $75 million. And they didn’t seem to care much for Larry and Sergey, either. “They really had an attitude,” one of them recalls. “It was: We’re smarter than you, our stuff is great, everyone else’s sucks.”

But two VCs felt differently: John Doerr, of Kleiner Perkins, and Mike Moritz, of Sequoia Capital. Doerr was arguably the most important venture capitalist in the Valley, and Moritz was the VC who’d backed Yahoo. With Moritz behind them, Larry and Sergey reasoned, Google would have a line into a company they badly wanted to do business with. Similarly, they saw Doerr and his firm as an avenue into AOL, which Kleiner had financed. For their parts, Doerr and Moritz were as smitten with Google’s product as Bechtolsheim had been. The absence of a business plan didn’t faze them; nor did the price. Indeed, Doerr was known to advise novice VCs, “If you like the founders and you like the technology, price doesn’t matter.”

By May 1999, Doerr had decided he wanted to invest in Google, and so had Moritz. Given the connections each could provide, Larry and Sergey were keen, even adamant, about snagging both as backers. There was just one hitch: Neither father was inclined to share custody of his new favorite sons.

Before the internet bubble, it was common for venture firms to team up on deals in order to spread risks and defray costs. By 1999, however, the size of many VC funds had swollen to $1 billion or more, and the venture capitalists had more money than they knew what to do with. Not only was collaboration no longer necessary; it wasn’t desirable.

Nowhere was the every-VC-for-himself ethos more ingrained than at Sequoia and Kleiner Perkins. Two of the oldest venture firms in Silicon Valley, they were also the most powerful and influential. But in outlook and demeanor, they were diametric opposites. Kleiner was flashy, promotional, profligate; Sequoia was low-key, gritty, frugal. In the words of one Kleiner partner, William Randolph Hearst III, “KP is Athens; Sequoia is Sparta.”

Doerr and Moritz were as different as their firms. Doerr: midwestern, Catholic, schooled as an engineer at Rice University. Moritz: Welsh, Jewish, schooled in history at Oxford. Doerr’s introduction to Silicon Valley was selling microchips at Intel. Mor-itz’s intro was covering the Valley for Time. Where Doerr was an enthusiast prone to hyperbole (“the largest legal creation of wealth in the history of the planet” was how he famously described the Valley during the boom), Moritz was a skeptic and a cynic (his view of the Valley in 1998: “There’s going to be a lot of flesh on a lot of windshields”). And although no overt animosity existed between them, they were rivals who only rarely worked together.

Taking on the task of getting the VCs to commingle were a pair of Google advisers, Ram Shriram and Ron Conway. Shriram, a former Netscape executive and one of Google’s seed-money suppliers, had known Doerr for years; and Conway, a Silicon Valley angel investor (one who puts small sums into start-ups before they’re ripe for VC funding), was friendly with Moritz. Day after day, Shriram and Conway wheedled and romanced the venture capitalists, all to no avail. “You had to convince both sides that Larry and Sergey were really serious about wanting two VCs,” an early Google insider says. “John and Mike both wanted to do the deal alone. It turned into a fight. They didn’t realize how headstrong the founders were.”

Larry and Sergey couldn’t believe what was happening. Neither could Doerr or Moritz. During the dot-com melee, the VCs were constantly confronted with money-hungry children wanting to be taken care of. But here the kids were saying, “You guys have to learn to share.”

About a month into the standoff, Larry and Sergey called Conway and said, “Get a list together of your angel friends—we might just do the whole deal with angel money. KP and Sequoia don’t get it…. We’re gonna give them another couple of days, and then it’s over.”

Conway and Shriram delivered the message. The next Saturday morning, Conway was sitting in a Starbucks parking lot when he got a call from Shriram. “The fight is over,” Shriram said. “They’re both going to invest, and it’s going to be fifty-fifty.”

On June 7, 1999, Google announced the financing: a $25 million infusion, led by Kleiner Perkins and Sequoia. The VCs each now owned roughly 10 percent of Google, and Google now had all the money it would need to pursue its ambitions. But Larry and Sergey had acquired something more valuable than money, and potentially more problematic: a sense that, unlike so many young founders before them, they could defy the grown-ups’ wishes and not be punished for it.

Despite their differences, Moritz and Doerr agreed emphatically about one thing: Google needed to hire an A-list CEO, and quickly. Before investing, they had elicited a verbal commitment from Larry and Sergey that they would do just that.

But while Larry and Sergey had assured the VCs that they agreed, they did nothing about it. To be fair, they were busy moving Google and its sixty-odd employees into a new headquarters in Mountain View, which they dubbed the Googleplex; they were coping with skyrocketing popularity, to the tune of 4 million queries a day; and they were striking their first major licensing deal, to provide Web search for AOL/Netscape.

Still, as months rolled by and 2000 approached with no CEO on the horizon, it was clear that the boys were balking about bringing in someone above them. Eventually, they began to make the case ardently against adult supervision, citing Bill Gates, Jeff Bezos, and Michael Dell as precedents. “They saw the founders who had retained control as CEOs as the best, most creative, and most successful,” says Dave Whorton, a venture capitalist who was then Doerr’s protégé. “What they didn’t see were all the others who had failed. That wasn’t in their data set.”

Moritz monitored the situation with mounting frustration. Suspicious by nature, he’d doubted all along that Larry and Sergey would honor their commitment. Confronting them, he threatened to pull Sequoia’s money if they refused to yield. “It was not a pleasant conversation,” Moritz recalls. “In the heat of things, I rattled my saber loudly.”

Doerr told me at the time that he, too, was contemplating such a threat. But instead he chose a different tack. What Doerr was hearing from Larry and Sergey was a combination of the engineer’s demand for logic and the adolescent’s impulse to challenge parental authority. “Because we say so” or “because that’s how it’s done” would never convince the boys of anything, and that was what the VC’s arguments sounded like to them.

So Doerr proposed that the boys take a little tour around Silicon Valley. He would arrange for them to meet and discuss the matter with some of the industry executives they had long admired. The names on Larry and Sergey’s itinerary comprised a high-tech murderer’s row: Intel chairman Andy Grove; Amazon.com’s Bezos; Sun chairman and CEO Scott McNealy; Intuit founder and former chairman Scott Cook—the list went on and on.

Doerr discreetly kept tabs on the meetings as they stretched out over several weeks. At one point, he asked Bezos what he thought of the boys’ obstinacy.

“Hey, some people just want to paddle across the Atlantic Ocean in a rubber raft,” Doerr recalls Bezos replying. “That’s fine for them. The question is whether you want to put up with it.”

The prospect of putting up with it became more palatable when Doerr heard back from Larry and Sergey. Having gotten Socratic with their heroes, they were finally prepared to acquiesce in the hiring of a CEO. Their definition of acquiescence, however, was neither unconditional nor expeditious. “If Larry and Sergey were given clear instructions by a divine presence, they would still have questions,” Moritz says.

For more than a year, in fact, Doerr and Moritz would continue to tear at their hair. But Larry and Sergey refused to be rushed; they took their own sweet time.

“Most young people starting companies are afraid,” says Joe Kraus, who at 21 was a founder of Excite. “They’re afraid of failing. Afraid of getting it wrong. Afraid of missing their chance. Afraid, especially, of saying no to John Doerr. But these guys weren’t afraid.”

When Google announced in early 2001 that Eric Schmidt was becoming its chairman—a move followed a few months later by his installation as CEO—Silicon Valley was puzzled. For the past four years, Schmidt had served as CEO of Novell, and for nearly fifteen before that he was a senior executive at Sun. So his decision, in the midst of the NASDAQ meltdown, to join a dot-com start-up—a search-engine start-up, no less—simply did not compute.

Actually, it did. Schmidt’s tenure at Novell had been decidedly less than joyful. Novell was a company in steep decline when he arrived, and his labors had only modestly reversed it. Worse, hardly anyone gave a damn if Novell lived or died; its software was boring even to software freaks.

For Schmidt, working at Google was an ideal solution to a high-tech midlife crisis. It put him back at the center of the action while letting him kick it with the boys. Describing his attraction to Larry and Sergey, Schmidt says, “We’re not just three random guys. We’re all computer scientists with the same interests and backgrounds. The first time we met, we argued for an hour and a half over pretty much everything—and it was a really good argument.”

Schmidt met all of Larry and Sergey’s stringent criteria. He had a credible name, a Ph.D. (from Berkeley), and he promised not to push the boys aside or dismantle the quirky culture they’d engendered. “The board members told me, basically, ‘Don’t screw this thing up!’ ” Schmidt says. “They said, ‘It needs some infrastructure, some growing, but the gem here is very real.’ ”

At a glance, the culture Schmidt pledged not to replace seemed a relic of the just- bygone era: The Googleplex looked like a dot-com wax museum. There were lava lamps, beanbag chairs, an on-site masseuse. But beneath the comically clichéd trappings, Google was becoming something interesting—and powerful. Having cut deals with an array of companies, most critically Yahoo, Google was processing more than 100 million searches a day and indexing an unprecedented 1 billion Web pages. Fueling this growth was a relentlessness about innovation. Larry and Sergey were openly, brutally elitist when it came to hiring engineers. (Job applicants, no matter their age, had to submit their college transcripts.) In software and hardware, Google’s innovation was remarkable. Using off-the-shelf components, the company was building what was, in effect, the planet’s largest computing system. And its official mission—”to organize the world’s information and make it universally accessible and useful”—extended far beyond searching the Internet.

“I did not understand when I came to the company how broad Larry and Sergey’s vision was,” Schmidt says. “It took me six months of talking to them to really understand it. I remember sitting with Larry, saying, ‘Tell me again what our strategy is,’ and writing it down.”

At the same time, the boys had fostered an environment that was flamboyantly idealistic. Search was all, profit peripheral, “Don’t be evil” the corporate motto. (Asked later what the slogan meant, Schmidt would say, “Evil is what Sergey says is evil.”)

In short, Larry and Sergey had already encoded the DNA of the company Schmidt was supposed to run. The character they instilled in Google could be summed up in three phrases: Technology matters. We make our own rules. We’ll grow up when we’re damn good and ready.

The boys’ reality took some getting used to for Schmidt. It wasn’t just the dot-com fripperies that fazed him or the dogs trotting up and down the halls. It was the squatter in his office. (The interloper was an engineer frustrated with the bustle in his own shared quarters. After first attempting to evict him, Schmidt gave up and endured the situation for several months.) He also found himself frequently occupied with grounding Larry and Sergey’s flights of fancy. There was the time the boys suggested having Google enter the business of low-cost space launchings. And the time Larry reportedly tried to ban telephones from a new Google office building.

Even so, Schmidt now looks back fondly on the genesis of the relationship. “Our roles evolved quickly,” he says. “Sergey is the master dealmaker, Larry is the deep technologist, and I make the trains run on time.” Seizing on a different analogy, he adds, “We developed the equivalent of what’s known in basketball as a run-and-shoot offense: Larry and Sergey’s only goal is to run to the other end of the court as fast as possible, so they’re always ahead of everyone else, strategically, technologically, culturally. I’m the not-running-ahead person. I stay back and get the rebounds.”

Others, however, viewed the apparent anarchy at Google more skeptically. Stewart Alsop, a venture capitalist and former journalist, recalls interviewing Schmidt onstage at an industry conference. “I asked him, ‘How the hell do you make decisions? From the outside, it seems crazy.’ Eric spent forty-five minutes trying to answer, but he couldn’t describe it. And the thing was, he was proud of that. He said it was a new way of doing business. There was no hierarchy; they acted as a triumvirate of equals. They were breaking all the rules. I thought it was a disaster in the making.”

Doerr’s views were less apocalyptic, but he harbored some concerns. “The company wasn’t falling apart,” says one of his Kleiner partners, “but it could have been headed in the wrong direction. The situation was unstable.”

Seeking to stabilize it, Doerr picked up the phone and sought an intercession from Bill Campbell. Campbell, former CEO and current chairman of Intuit, as well as an Apple board member and Steve Jobs confidant, was one of the most respected executives in Silicon Valley. His nickname was the Coach—a reference both to his past as a college-football field general and his present sideline as an informal management adviser.

Now, in late 2001, Campbell started logging hours at Google, visiting the company several times a week, playing mentor to Larry, Sergey, and Schmidt—a relationship that has only grown over time, though it has never been publicly disclosed before in any detail. “Don’t overdramatize my role,” Campbell urges me. “I’m just another set of eyes, another person in the room.”

Hardly. “I think John Doerr would say Bill Campbell saved Google,” says Kleiner partner Will Hearst. “He coached Eric on what it means to be a CEO—not the CEO of Novell but of a company like Google. He taught Eric it’s a lot like being a janitor: There’s a lot of shit you have to do. And he spent a lot of time with Larry and Sergey, explaining the difference between being a cool company or a smart company and being a successful company. It didn’t happen overnight, but Bill Campbell won.”

“God bless that man” is what Doerr says. “I don’t know where the company would be without him.”

Moritz concurs: “He is the quiet, behind-the-scenes, unsung hero in this whole epic.”

Even Schmidt, who might have felt undermined by Campbell’s presence, has nothing but praise for him. “At first we tried to integrate him just a little bit, but we eventually decided our only goal was to get as much of Bill’s time as possible. Our basic strategy is to invite him to everything. He’s priceless beyond belief.”

Google’s embrace of Campbell marked a turning point for Larry and Sergey. It was a symbol of their dawning awareness that they had some things to learn—and that with age occasionally comes wisdom. Campbell’s arrival also signaled Google’s transition from a glorified research lab into a proper company, one that cared about management and, yes, even making money.

Since its founding, Google’s financial condition had been, as Moritz describes it, “lots of cash outgoing, very little incoming, and we were trying to pin the tail on the donkey as to what the business was.”

In 2000, Google started experimenting with advertising. Because Larry and Sergey had long been vehemently opposed to banner and pop-up ads, the company’s approach was minimalist: unobtrusive, text-based messages on the right side of the page. Late the next year, the company unveiled a program called AdWords, which let advertisers bid for keywords, with higher bidders getting better placement and being charged a fee only when users clicked on the ads. (In much of this, Google was following a path blazed by rival Overture Services, which later sued for patent infringement. The case was ultimately settled out of court.) In 2003, Google launched AdSense, a program extending its ad system to non-search sites, in effect making Google a media broker for Web operators ranging from The New York Times and AOL to countless humble bloggers.

Advertising turned Google into a commercial juggernaut. In 2001 the company had $87 million in revenues and was barely in the black; two years later, its sales had soared to $1.5 billion and its operating profit to more than $340 million. The company had introduced Google Image Search, Google News, and Froogle, and its name made the syntactical leap from noun to verb. The only question now was when, not whether, the company would cross the Rubicon. All eyes in the Valley and on Wall Street turned to the Google IPO.

Larry and Sergey were never wild about going public. The main rationale for doing it was to raise money, and Google already had plenty. The boys knew that past IPOs had unleashed tidal forces of greed and envy that wreaked havoc on promising start-ups. They also knew that being a public company meant acquiring a new and demanding set of masters: Wall Street analysts, shareholders, securities regulators, the press. Your ability to keep commercial secrets diminished dramatically. If this was what it meant to be an adult company, who wouldn’t prefer perpetual adolescence?

But the end of Google’s adolescence wasn’t optional. The boys had obligations to their investors and underlings. Doerr and Moritz, both sitting on funds that had been hammered by the collapse of the bubble, were keen to cash in their Google chips, while employees who’d been slaving for years were eager for a payday that would put rental housing behind them. On top of that, there was an SEC rule that would require Google (due to the number of shares it had given out) to start publishing its financials in April 2004. Public or private, the veil of fiscal secrecy was about to be lifted.

In the fall of 2003, the Google high command began discussing the IPO in earnest. Almost immediately it was apparent that Larry and Sergey had no intention of staging a traditional offering where Wall Street underwriters ran the show—setting the price of the shares and doling them out to favored investors, who could then expect a windfall from a first-day run-up in the stock. Instead, the boys wanted to conduct the IPO through a Dutch auction, a novel process allowing anyone who wanted to own a piece of the company to bid for its newly minted stock in the days before it started trading. They also wanted to issue two classes of shares, giving Larry, Sergey, and Google’s executives and directors ten-to-one voting power over ordinary investors. And they wanted to make it clear that Google wouldn’t accede to Wall Street’s congenital short-termitis. Its executives would focus on the long term, not be slaves to quarterly profits.

Each of these positions had its virtues. Dutch auctions promised to let small investors in on the IPO action; to reduce the power of underwriters to game the system, as they had done so flagrantly during the bubble; and to maximize the financial return from the offering to Google—as opposed to Wall Street. Dual-class voting structures, too, had advantages, which is why they were used by media giants like The New York Times and by the sainted Warren Buffett’s Berkshire Hathaway. With two share classes in place, the chances of a hostile takeover of Google would be virtually nil. As for short-termitis, who could deny that pressure to “make the quarter” had led to much corporate mischief?

“None of this was ill-considered,” says maverick San Francisco banker William Hambrecht, a vocal proponent of Dutch auctions and an underwriter of the Google IPO. “They had talked to Buffett, talked to Steve Jobs, talked to lots of people. They were trying to do the right thing for the company—to avoid the mistakes of the past.”

But taken together, Larry and Sergey’s plans sent a different message: They intended for Google to be a public company that operated as if it were private. “They said, ‘If we have to go public, we’ll go public,’ ” says a pre-IPO Google investor. ” ‘But we’re going public on our terms—we’re going to have our cake and eat it, too.’ ” The Wall Street bankers who would wind up leading the deal, at Morgan Stanley and Credit Suisse First Boston, privately issued dire warnings about proceeding with an auction. They argued that unsophisticated individual investors might bid up the stock on opening day to a stratospheric level—to a market value as high as $100 billion, they said—only to have it come quickly crashing down, a costly embarrassment.

Moritz, who had done an auction IPO previously with Hambrecht, thought these warnings were overblown. But Doerr and others were swayed. The fear that the IPO might “run away from us,” as Doerr put it, led to various maneuvers designed to dampen demand from individual investors: an offering in August, when the market was usually slow; a complex registration process for bidders; a high price on the stock. The result was a kind of bastard deal, a compromise between Larry and Sergey’s mold-breaking aspirations and the conservative instincts of the grown-ups, forged in an atmosphere suffused with Sturm und Drang.

“We said, ‘If you want to do an auction, do a fucking auction,’ ” says a partner in one of the VC firms. ” ‘But why don’t you also try listening to us? We’re not new to this, you know. Warren Buffett is your guru? Is this the same Warren Buffett who doesn’t want anything to do with tech stocks? Are we talking about the same Warren Buffett?’ ”

Apparently, yes. Early in the last week of April, just days before Google was set to file its IPO paperwork, Larry told the board he’d decided to write an open letter, à la Buffett, to be included in the document. Nervously, the board consented, but time was running short. The night before the deadline, Doerr drove to the Googleplex. It was after midnight, and Larry was laboring like a college student on speed crashing a term paper. Doerr read Larry’s manifesto: ” ‘An Owner’s Manual’ for Google’s Shareholders.” And then, as gently as possible, Doerr said, “We need an editor.”

Even after being edited, the letter, like the IPO itself, debuted to mixed reviews. From Wall Street, with its antipathy toward auctions, came a torrent of unattributed sniping. Corporate-governance mavens pilloried the dual-share structure, which seemed starkly at odds with the populist tone of Larry’s letter. Then came the news that, of the 24.6 million shares being offered, 10.5 million were being sold by Google insiders, including Larry and Sergey. For the first time in the boys’ careers, they were tarred by the brush of greed.

By early August, when Larry, Sergey, and Schmidt set off on the IPO road show, the offering was reeling. With the NASDAQ down 15 percent from its January high, the stock price—projected by the company at $108 to $135 a share—looked excessive. Wall Street piled on the criticism; mistakes piled up left and right. Investors attending the road show described the Google troika as unprepared, uncommunicative, and smug. As the press turned nasty, Google, throttled by the quiet period, could do nothing to stanch the bleeding, which only grew more profuse with the appearance of the Playboy interview. Though what the boys said in the interview wasn’t controversial, its appearance at a time when they were required to be silent indicated either disregard for the rules or screaming incompetence.

Was the backlash fair? Bill Hambrecht thinks not. “The biggest frustration among institutions was that they weren’t getting inside information from Eric, Larry, and Sergey. Normally, a company says, ‘We can’t give you forward projections, but talk to our bankers.’ But Google didn’t do that. They followed the rules. They got a bum rap.”

Bum or not, the rap took its toll. On August 13—a Friday, note—Google opened its auction. For five days, bids flowed in across the Internet. Soon it was clear that the efforts to tamp down retail demand had worked all too well; more than 80 percent of the buyers turned out to be institutions. What those institutions wanted, naturally, was a first-day pop in the stock. With striking consistency, they bid just below the price range Google had initially set. In effect, the institutions were demanding a discount—and they got one. On August 18, Google announced it was scaling back the offering to 19.6 million shares and selling them for $85, 37 percent below the top of the original range.

The next day, Google’s stock opened trading just before noon at $100. Among the Googlers surrounding Larry and Schmidt on the Morgan Stanley trading floor, the sense of relief was palpable, the celebration muted. Within a half hour, the Google guys were gone, and I found myself asking Doerr if he considered the IPO a success. “Absolutely,” he replied. “We raised $1.6 billion for the company—a record for a technology IPO—and the investors all made money.”

But what about the pummeling of Google in the press? The damage to its image? “I think six months from now the bad press will be forgotten. The company, its merits, what it’s doing, how it’s doing, will be the only things that matter.”

Have Larry and Sergey learned anything? I asked. Have they been humbled, even humiliated?

Doerr thought for a minute. “I don’t know,” he finally said. “They may feel humbled and humiliated—or they may feel differently as of the last half hour. What I don’t think will change is how they run the company. They both have—” he chuckled “—incredibly strong points of view. But I do think they’re learning all the time. I also think they’re growing. Not growing up—I hate it when people call them ‘the boys.’ Please don’t ever put those words in my mouth. I don’t think of them that way. And if I ever did, I sure don’t anymore.”

Today, there’s no disputing that Doerr was right about one thing: Google’s affliction with negative press was temporary. Since the IPO, headlines have heralded an avalanche of Google products and projects, each intriguing, some truly thrilling: Google Library. Google Print. Google Scholar. Google Desktop Search. Wall Street, meanwhile, has embraced Google as if it were the new Microsoft—and maybe it is. In the first three quarters of last year, its sales surpassed $2 billion, and its operating profit margin, of more than 60 percent, was greater than that of the Beast from Redmond at its zenith.

Even so, a corps of doubters remains. Skeptical moneymen point out that the company’s market value, of roughly $50 billion, is possibly a mirage, artificially inflated by the scarcity of tradable Google stock. In November, December, and January, fresh tranches of shares hit the market as company insiders were gradually allowed to sell their holdings. But by far the biggest flood of new shares, 177 million, were unlocked on February 14. (Larry and Sergey plan to sell roughly 19 percent of their holdings in the next fifteen months.) At the same time, Google’s rivals are swarming. Amazon has plunged into search. Yahoo has redoubled its efforts. And Microsoft makes no bones of its aim to turn Google into the next Netscape.

But to those who know Google best, these are not the stickiest issues. John Battelle, author of a forthcoming book on the company, observes, “I’m not saying that Microsoft—or AOL, or Yahoo—can’t prosper, or even ‘win’ in the long term. But crush Google à la Netscape? No friggin’ way. The only thing that can kill Google is Google itself.”

In Silicon Valley, few people think the ungainly triumvirate at Google is heading off a cliff. The perception instead is that they’ve figured out an agreeable modus vivendi. “If you gave Eric sufficient alcohol,” says Stewart Alsop, “he would tell you, ‘I’m not here to run the company; I’m here to get along with Larry and Sergey. I’m here to make the trains run on time, collect my money, and go home.’ ” Alsop adds, “Eric doesn’t have a huge ego. He’s willing to suffer the myriad small indignities of being a pet CEO.”

But when I had lunch with Schmidt last fall at the Googleplex, it didn’t seem quite that simple. He had just returned from attending the Forstmann Little conference in Aspen. Though he’s been going for the past ten years, he explained, this was the first time he’d been seated for dinner at the head table—next to Elizabeth Hurley. “I guess I’ve finally made it,” he said with a grin.

As it happened, the boys were away on a round-the-world business trip. The previous day, Schmidt said, they had been in Dublin, where they’d met Ireland’s Deputy Prime Minister Mary Harney—and presented her with a Slinky. “We are in the presence of greatness here,” Schmidt remarked in perfect deadpan. “Even if we can’t always see it.”

With evident trepidation, a Google PR specialist asked if Larry and Sergey were going to participate in the upcoming third-quarter-earnings call to analysts, the company’s first chat with Wall Street since going public. Schmidt replied that the boys were planning to “lurk” silently on the call with him and the chief financial officer. “They said they’d only interject if something ‘interesting’ is said. I told them, ‘Larry, Sergey, the whole thing is going to be scripted and vetted by the lawyers—that’s our new world. Nothing interesting is going to be said. Is that clear?’ ”

Two weeks later, on the call, Larry and Sergey gave detailed presentations that were as lengthy as Schmidt’s.

The truth is, Schmidt finds himself in a supremely confounding, if not impossible, position. All along, he’s been torn between wanting to run with the boys and wanting to take away their allowance. But now that Google is public, this balancing act is immeasurably more difficult.

“The question is, What’s the best way to run a company?” he says on a balmy January afternoon in Mountain View. “In the last ten years, we had this notion of the all-knowing celebrity CEO, with his picture on the magazine covers. And I don’t think that’s the right way. There’s a book by this guy James Surowiecki. It’s called The Wisdom of Crowds, and he’s got, like, 500 examples of how, if you look at the decisions of big groups and individuals, the groups do far better on average. So the way we actually run the company is, we get everyone in the room, we encourage discussion and dissent, and then someone, usually me, pushes for an outcome, even if I disagree with it. That’s how we get velocity, and velocity is what matters in companies of size. You want to always be pedaling faster.”

As for the workings of the triumvirate, Schmidt says, “We have agreed to collaborate, and we collaborate in a specific way: If one of us feels strongly about something, the others can’t cut and run—they can’t just go and do whatever the hell they want.” He adds, “Every successful company has ultimately had multiple decisionmakers, at least in their formative stages: Bill Gates and Steve Ballmer at Microsoft. Bob Noyce, Gordon Moore, and Andy Grove at Intel. Scott McNealy and Vinod Khosla at Sun. The difference is, we’re telling the truth about it.”

Even so, formally, legally, Schmidt is the man in charge; he’s the one who will be the target of Wall Street’s ire or any lawsuits filed by pissed-off shareholders. But Larry and Sergey plainly hold all the cards at Google. They each have more than twice the voting power Schmidt has as well as the loyalty of the engineers. (A telling reflection of this CEO’s status can be found in the official corporate history posted on Google’s Web site: In a document of 3,756 words, which mentions Doerr, Moritz, Ram Shriram, Andy Bechtolsheim, and others, Schmidt’s name appears not once.) Even if he takes away the boys’ allowance, they have their own credit cards.

Which brings us back to Larry and Sergey and the question of what they’ve learned. Having repeatedly ignored the prevailing wisdom in Silicon Valley—inventing a search engine when everyone knew search was dead; building a business on Internet advertising when everyone knew it was impossible; antagonizing two revered VCs whose rings they should have been kissing—the boys have undoubtedly learned that conventional wisdom often isn’t wisdom at all. But salutary as that lesson is, there’s also a danger to it. As Excite founder Kraus puts it, “The risk is, they’ll think the hallmark of a good idea is that everyone says it’s dumb.” Similarly, it would be easy for the boys to conclude that dissing Wall Street carries no penalty. In the IPO, they told investment bankers and investors to go pound sand—and they wound up happy billionaires. Today their message to shareholders remains: Trust us, or put your money elsewhere.

All of that is fine for now. As long as Google is growing like gangbusters and making money like the U.S. Mint, Wall Street, investors, and employees will be infinitely indulgent.

But if the history of the technology industry teaches us anything, it’s that no one is ever that lucky—at least, not for long. Every important high-tech company has at some point stumbled and fallen on its face. Microsoft, Intel, Oracle, Sun, Apple, Cisco—all have made severe mistakes, paid a price, and then survived in large part because they understood what being a public company is about. They learned that Wall Street matters. That investors like transparency. That “trust us” isn’t enough.

When crisis eventually comes to Google—and it will—the company’s fate will depend on whether they have absorbed a handful of lessons that apply as much to life as they do to business: Adulthood happens. You can’t make all your own rules. And everyone fucks up.

John Heilemann has been writing about Silicon Valley for more than a decade and is the author of Pride Before the Fall.

Tags- Newsmakers, Google, Larry Page, sergey Brin
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http://www.theguardian.com/commentisfree/2013/dec/30/we-need-to-talk-about-ted
TED, The illuminati self-congratulatory Tony Robbins-esque festival gets reckoned with. Is TED the gentrification of thought?

We need to talk about TED

Science, philosophy and technology run on the model of American Idol – as embodied by TED talks – is a recipe for civilisational disaster
In our culture, talking about the future is sometimes a polite way of saying things about the present that would otherwise be rude or risky.

But have you ever wondered why so little of the future promised in TED talks actually happens? So much potential and enthusiasm, and so little actual change. Are the ideas wrong? Or is the idea about what ideas can do all by themselves wrong?

I write about entanglements of technology and culture, how technologies enable the making of certain worlds, and at the same time how culture structures how those technologies will evolve, this way or that. It’s where philosophy and design intersect.

So the conceptualization of possibilities is something that I take very seriously. That’s why I, and many people, think it’s way past time to take a step back and ask some serious questions about the intellectual viability of things like TED.

So my TED talk is not about my work or my new book – the usual spiel – but about TED itself, what it is and why it doesn’t work.

The first reason is over-simplification.

To be clear, I think that having smart people who do very smart things explain what they doing in a way that everyone can understand is a good thing. But TED goes way beyond that.

Let me tell you a story. I was at a presentation that a friend, an astrophysicist, gave to a potential donor. I thought the presentation was lucid and compelling (and I’m a professor of visual arts here at UC San Diego so at the end of the day, I know really nothing about astrophysics). After the talk the sponsor said to him, “you know what, I’m gonna pass because I just don’t feel inspired …you should be more like Malcolm Gladwell.”

At this point I kind of lost it. Can you imagine?

Think about it: an actual scientist who produces actual knowledge should be more like a journalist who recycles fake insights! This is beyond popularisation. This is taking something with value and substance and coring it out so that it can be swallowed without chewing. This is not the solution to our most frightening problems – rather this is one of our most frightening problems.

So I ask the question: does TED epitomize a situation where if a scientist’s work (or an artist’s or philosopher’s or activist’s or whoever) is told that their work is not worthy of support, because the public doesn’t feel good listening to them?

I submit that astrophysics run on the model of American Idol is a recipe for civilizational disaster.

What is TED?

So what is TED exactly?

Perhaps it’s the proposition that if we talk about world-changing ideas enough, then the world will change. But this is not true, and that’s the second problem.

TED of course stands for Technology, Entertainment, Design, and I’ll talk a bit about all three. I Think TED actually stands for: middlebrow megachurch infotainment.

The key rhetorical device for TED talks is a combination of epiphany and personal testimony (an “epiphimony” if you like ) through which the speaker shares a personal journey of insight and realisation, its triumphs and tribulations.

What is it that the TED audience hopes to get from this? A vicarious insight, a fleeting moment of wonder, an inkling that maybe it’s all going to work out after all? A spiritual buzz?

I’m sorry but this fails to meet the challenges that we are supposedly here to confront. These are complicated and difficult and are not given to tidy just-so solutions. They don’t care about anyone’s experience of optimism. Given the stakes, making our best and brightest waste their time – and the audience’s time – dancing like infomercial hosts is too high a price. It is cynical.

Also, it just doesn’t work.

Recently there was a bit of a dust up when TEDGobal sent out a note to TEDx organisers asking them not to not book speakers whose work spans the paranormal, the conspiratorial, new age “quantum neuroenergy”, etc: what is called woo. Instead of these placebos, TEDx should instead curate talks that are imaginative but grounded in reality.  In fairness, they took some heat, so their gesture should be acknowledged. A lot of people take TED very seriously, and might lend credence to specious ideas if stamped with TED credentials. “No” to placebo science and medicine.

But … the corollaries of placebo science and placebo medicine are placebo politics and placebo innovation. On this point, TED has a long way to go.

Perhaps the pinnacle of placebo politics and innovation was featured at TEDx San Diego in 2011. You’re familiar I assume with Kony2012, the social media campaign to stop war crimes in central Africa? So what happened here? Evangelical surfer bro goes to help kids in Africa. He makes a campy video explaining genocide to the cast of Glee. The world finds his public epiphany to be shallow to the point of self-delusion. The complex geopolitics of central Africa are left undisturbed. Kony’s still there. The end.

You see, when inspiration becomes manipulation, inspiration becomes obfuscation. If you are not cynical you should be sceptical. You should be as sceptical of placebo politics as you are placebo medicine.

T and Technology

T – E – D. I’ll go through them each quickly.

So first technology …

We hear that not only is change accelerating but that the pace of change is accelerating as well. While this is true of computational carrying-capacity at a planetary level, at the same time – and in fact the two are connected – we are also in a moment of cultural de-acceleration.

We invest our energy in futuristic information technologies, including our cars, but drive them home to kitsch architecture copied from the 18th century. The future on offer is one in which everything changes, so long as everything stays the same. We’ll have Google Glass, but still also business casual.

This timidity is our path to the future? No, this is incredibly conservative, and there is no reason to think that more gigaflops will inoculate us.

Because, if a problem is in fact endemic to a system, then the exponential effects of Moore’s law also serve to amplify what’s broken. It is more computation along the wrong curve, and I don’t it is necessarily a triumph of reason.

Part of my work explores deep technocultural shifts, from post-humanism to the post-anthropocene, but TED’s version has too much faith in technology, and not nearly enough commitment to technology. It is placebo technoradicalism, toying with risk so as to reaffirm the comfortable.

So our machines get smarter and we get stupider. But it doesn’t have to be like that. Both can be much more intelligent. Another futurism is possible.

E and economics

A better ‘E’ in TED would stand for economics, and the need for, yes imagining and designing, different systems of valuation, exchange, accounting of transaction externalities, financing of coordinated planning, etc. Because states plus markets, states versus markets, these are insufficient models, and our conversation is stuck in Cold War gear.

Worse is when economics is debated like metaphysics, as if the reality of a system is merely a bad example of the ideal.

Communism in theory is an egalitarian utopia.

Actually existing communism meant ecological devastation, government spying, crappy cars and gulags.

Capitalism in theory is rocket ships, nanomedicine, and Bono saving Africa.

Actually existing capitalism means Walmart jobs, McMansions, people living in the sewers under Las Vegas, Ryan Seacrest … plus – ecological devastation, government spying, crappy public transportation and for-profit prisons.

Our options for change range from basically what we have plus a little more Hayek, to what we have plus a little more Keynes. Why?

The most recent centuries have seen extraordinary accomplishments in improving quality of life. The paradox is that the system we have now –whatever you want to call it – is in the short term what makes the amazing new technologies possible, but in the long run it is also what suppresses their full flowering. Another economic architecture is prerequisite.

D and design

Instead of our designers prototyping the same “change agent for good” projects over and over again, and then wondering why they don’t get implemented at scale, perhaps we should resolve that design is not some magic answer. Design matters a lot, but for very different reasons. It’s easy to get enthusiastic about design because, like talking about the future, it is more polite than referring to white elephants in the room.

Such as…

Phones, drones and genomes, that’s what we do here in San Diego and La Jolla. In addition to the other insanely great things these technologies do, they are the basis of NSA spying, flying robots killing people, and the wholesale privatisation of biological life itself. That’s also what we do.

The potential for these technologies are both wonderful and horrifying at the same time, and to make them serve good futures, design as “innovation” just isn’t a strong enough idea by itself. We need to talk more about design as “immunisation,” actively preventing certain potential “innovations” that we do not want from happening.

And so…

As for one simple take away … I don’t have one simple take away, one magic idea. That’s kind of the point. I will say that if and when the key problems facing our species were to be solved, then perhaps many of us in this room would be out of work (and perhaps in jail).

But it’s not as though there is a shortage of topics for serious discussion. We need a deeper conversation about the difference between digital cosmopolitanism and cloud feudalism (and toward that, a queer history of computer science and Alan Turing’s birthday as holiday!)

I would like new maps of the world, ones not based on settler colonialism, legacy genomes and bronze age myths, but instead on something more … scalable.

TED today is not that.

Problems are not “puzzles” to be solved. That metaphor assumes that all the necessary pieces are already on the table, they just need to be rearranged and reprogrammed. It’s not true.

“Innovation” defined as moving the pieces around and adding more processing power is not some Big Idea that will disrupt a broken status quo: that precisely is the broken status quo.

One TED speaker said recently, “If you remove this boundary … the only boundary left is our imagination”. Wrong.

If we really want transformation, we have to slog through the hard stuff (history, economics, philosophy, art, ambiguities, contradictions). Bracketing it off to the side to focus just on technology, or just on innovation, actually prevents transformation.

Instead of dumbing-down the future, we need to raise the level of general understanding to the level of complexity of the systems in which we are embedded and which are embedded in us. This is not about “personal stories of inspiration”, it’s about the difficult and uncertain work of demystification and reconceptualisation: the hard stuff that really changes how we think. More Copernicus, less Tony Robbins.

At a societal level, the bottom line is if we invest in things that make us feel good but which don’t work, and don’t invest in things that don’t make us feel good but which may solve problems, then our fate is that it will just get harder to feel good about not solving problems.

In this case the placebo is worse than ineffective, it’s harmful. It’s diverts your interest, enthusiasm and outrage until it’s absorbed into this black hole of affectation.

Keep calm and carry on “innovating” … is that the real message of TED? To me that’s not inspirational, it’s cynical.

In the US the rightwing has certain media channels that allow it to bracket reality … other constituencies have TED.

• This article first appeared on Benjamin Bratton’s website and is republished with permission. It is the text of a talk given at TEDx San Diego

———————————————————————-

Let me try to sum up the VC’s TED party concept, in short, per the writer above:

“TED Talks and the Techno-Futurist paid Tony Robbins-like EST-ish seminars are Male Bovine Excretion Deliverance Systems For The Enthralled Masses”. Is that what the article is saying?

Does it imply that TED is “vacuous superficial celebratory self-indulgent ideological infomercial fluff for patriotic mythmaking for Silicon Valley elitists?”

“It seems that TED hires preening, vain, egotists with great used car salesman/cable tv news pundit speaking skills who espouse popcorn intellectualism but have little actual engineering background who deliver bite sized tidbits of information, with no actual depth, to the lowest common denominator of wide eyed UFO enthusiasts and hipsters.”

“Charismatic intellectual gurus wrapped in TED showmanship and glitz cause cults full of Kool Aid drinkers to buy into their crap-peddling in order to get in the VC frat funding club. Utopian fake intellectualism is the vat of poo that Silicon Valley Vc’s revel in because the rest of society thinks they are such arrogant weasels.”

The writer seems to say that TED is a “festival of self-importance. A waterfall of ego and a back-patting extravaganza of the loud and self-centered telling the masses how much louder and more important they are than the attendees. To talk at TED you have to hire a ghost-writer to write you a book about some amorphous topic that sounds important in a one sentence description but accomplishes nothing nor instructs anyone how to do anything tangible that will have visible non-commercial results outside of pumping a stock portfolio.

Almost no speaker leaves TED and does anything tangible. Almost no speaker at TED has, or will, do anything that you can pull metrics on except get their PR agent to book them in more seminars. “But they inspire us to do great things”, cry some of the middle class attendees”… Do they really?

Does that encapsulate the writers point?

TOMG- (Note: I am NOT Charlie Sheen)
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Investor Tom Perkins likens critics of the rich to Nazis – SFGate

Tom Perkins, the founder of venture capital firm Kleiner Perkins Caufield & Byers, wrote a letter to the editor in Saturday’s Wall Street Journal in which he compares criticism of the rich to the Nazi persecution of the Jews in the 1930s.
sfgate.com/politics/article/Investor-Tom-Perkins-l…

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fellowship

19 thoughts on “The 1% illuminati Lithium-Gate VC’s- Rigging Washington DC for profit at the expense of the public

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