That was my first reaction too but when you think about it there is an internal logic here. Arrington was the overall editor so he had to go because he could skew coverage. Siegler is staying on but only covering Apple so CrunchFund can't influence his writing because Apple is way too big for them to invest in.
I mean, it's definitely right on the line but I'm not sure it crosses it.
Yeah, but the thing is Arrington sold, agreed to spend 2 years with AOL, then did something that is obviously a conflict of interest to get out of his obligation. As a startup would I want to make an agreement with someone like that?
Maybe AOL didn't make them sign any agreements, but the way they've bailed on Techcrunch, caused a shitstorm, and started up this fund and competing tech blog all feels really slimey. I can't imagine why any startup would want to accept money or work with them.
So my first thought on this thing, was doesn't Arrington have a non-solicit clause with AOL? Most people in tech do - they can't just go start a new company and take all their co-workers with them.
One thing that may be awkward to talk about but comes up, here, is that my imagining of VCs were that of all rich people, even partners. I imagine Siegler is well taken care of a Techcrunch, but it seems "well taken care of" is a far broach from having the cash to be a Venture Capitalist. Am I misinterpreting the needs of such individuals? Is it possible he's just a one-off exception who has the cash to spend here?
Apparently I didn't have clarity on the technicalities of a "Partner". Always imagined it as someone with a percentage stake of the company and/or here, someone who was also investing their own coin.
The investors of a VC fund are known as "Limited Partners" or LPs. They put up the money but do not select the investments, sit on the boards of portfolio companies, or generally do anything except collect their money at the end of the fund.
The managers of the VC fund are known as "General Partners" or GPs. They are the ones who decide on what to invest in, take an active role in advising those portfolio companies, and are paid a management fee as well as a percentage of the positive returns (the "carry").
So "Partner" doesn't mean anything, unless prefixed with "Limited" or "General".
A VC Firm is just a company like any other company. Generally they are Partnerships rather than LLCs or Full-Out Corporations but they're still just a business and their investments (and the money they have to make them) are all assets of the company.
So you can be penniless and still be a General Partner at a VC Firm if the other partners choose to vote you in. In his case they obviously feel his experience and connections are of some value and are willing to give him a part of the firm to acquire that experience.
Good for him, but I don't understand what particular set of skills, apart from his ability to write, he brings to add value as a VC-firm partner. Anyone?
His 'network' is not a skill, and I assume his network is a subset of Arrington's, so I don't consider that an advantage. Honestly, outside of this being a reward for his loyalty in the past with Arrington, I don't see how this makes sense for CrunchFund as a business.
Those are important skills for being a VC, I agree. Did reading MG's articles convey to you that he had those skills?
I really thought everything he wrote was a combination of PR-feed and opinion. Maybe I didn't follow him as much as you, but it just felt like he had early access to stuff and was able to formulate opinion (correctly/incorrectly) that most of us could have. He certainly didn't come across as a visionary or a pundit to me.
My outside view of him is the same as yours, but remember that he isn't being hired by the outside based on what he is written - he's being hired by someone who has known him extremely well personally, and presumably therefore knows him better than readers do.
I don't think any of those things describe him. I always imaged his next move would be to go to an apple rumor blog, because his real skill is obviously churning out fluff pieces on Apple and Arrington doesn't have to chase ad revenue on uncrunched.
Everyone and their dog has an opinion on Apple, and they are floated far and wide on the internet. Yet despite the fact that Apple isn't really even part of TechCrunch's core focus, Siegler has managed to cut through this pundit overload to become one of the most influential voices regarding Apple on the internet. That speaks to skills far beyond a typical internet purveyor of puffery.
None of us here know him any better than Mike Arrington does, and apparently Arrington believes in him completely, or he wouldn't have made the offer. It certainly makes sense for Arrington to add people that he believes he can rely on to his team, though -- all good businesses do that.
Of course, how this (or CrunchFund in general) will pan out is still anyone's guess, though.
Perhaps Arrington trusts his judgement and expects that he would be nice to have around as "another set of eyes" when brainstorming, making decisions, etc. Even if their skillsets and networks are pretty similar, it's often better to have two people than one.
pattern recognition? My favorite investors were entrepreneurs once, but those that can at least identify attributes of companies that tend to wine can add value.
Not sure how being a blogger qualifies one to become a VC, but I'm guessing this is to keep him "in the techcrunch mix". TC doesn't risk losing a solid contributor, and MG gets to potentially make a good amount of cash.
No wonder these guys were so happy to shit all over the asset they sold to AOL. They didn't need it anymore and loyalty to the TC Don was much more important. I'm sure AOL wishes they had a few more clauses in the agreement now.
It's interesting that I saw this article in Chinese, on the China Unicom portal this morning. Apparently this is even interesting to the tech watchers in China -- although for the life of me, I can't understand how!
This TechCrunch/CrunchFund stuff gets confusing. Is TC a news site and CF a VC? It seems analogous to the New York Times starting NYTFund and then having reporters cover their companies. While I suppose the lines are clear (to someone,) it just seems like there's a lot of Crunch and even more confusion on the part of the unwashed. Maybe I need a shower. Or a big CF investment and a positive TC review to soothe my skepticism.
I didn't know that.. Oh well, NYTimes corporate ethics has never really been their forte. I guess they need to diversify to make up for their increasing irrelevance in the news space.
My issue is that no matter the source, there are always conflicts of interest. And frankly, whether or not a blogger is an investor in a company is at least a lot more obvious than the typical Valley BS politicking where you're afraid to piss off the wrong person.
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[ 2.5 ms ] story [ 96.8 ms ] threadI mean, it's definitely right on the line but I'm not sure it crosses it.
The managers of the VC fund are known as "General Partners" or GPs. They are the ones who decide on what to invest in, take an active role in advising those portfolio companies, and are paid a management fee as well as a percentage of the positive returns (the "carry").
So "Partner" doesn't mean anything, unless prefixed with "Limited" or "General".
So you can be penniless and still be a General Partner at a VC Firm if the other partners choose to vote you in. In his case they obviously feel his experience and connections are of some value and are willing to give him a part of the firm to acquire that experience.
His 'network' is not a skill, and I assume his network is a subset of Arrington's, so I don't consider that an advantage. Honestly, outside of this being a reward for his loyalty in the past with Arrington, I don't see how this makes sense for CrunchFund as a business.
I really thought everything he wrote was a combination of PR-feed and opinion. Maybe I didn't follow him as much as you, but it just felt like he had early access to stuff and was able to formulate opinion (correctly/incorrectly) that most of us could have. He certainly didn't come across as a visionary or a pundit to me.
That's not even a stretch, its an intergalactic leap.
psychotik is right, this is just a reward for his "loyalty".
None of us here know him any better than Mike Arrington does, and apparently Arrington believes in him completely, or he wouldn't have made the offer. It certainly makes sense for Arrington to add people that he believes he can rely on to his team, though -- all good businesses do that.
Of course, how this (or CrunchFund in general) will pan out is still anyone's guess, though.