

Michael Arrington Resigns From Techcrunch - moses1400
http://online.wsj.com/article/SB10001424053111904583204576545302082353610.html

======
glymor
If the paywall is affecting you:

TechCrunch founder Michael Arrington is resigning as editor of the popular
technology blog, and will run a $20 million venture-capital fund backed by
TechCrunch-owner AOL Inc. and several venture-capital firms.

Mr. Arrington "will run the fund and will continue to write for TechCrunch,
but will have no editorial oversight," said an AOL spokesman. Erick Schonfeld,
who has served as co-editor in New York, will become interim editor while AOL
searches for a replacement for Mr. Arrington, the spokesman said. AOL
purchased the site last year.

Mr. Arrington's new fund, called CrunchFund, closed Thursday with $20 million,
according to people familiar with the matter. AOL leads the limited-partner
group, which includes a long roster of venture firms that kicked in $1 million
each: Austin Ventures, Kleiner Perkins Caufield & Byers, Greylock Partners,
Redpoint Ventures and Sequoia Capital. Several individuals contributed money,
including Marc Andreessen and Ben Horowitz of the venture firm Andreessen
Horowitz; general partners at Benchmark Capital; angel investors Ron Conway
and Kevin Rose; and Yuri Milner of Russian firm DST Global.

It isn't immediately clear what is the fate of AOL's venture-capital arm, AOL
Ventures, which has made recent seed investments in start-ups such as spam-
defense company Impermium and price-tracking service Shopobot.

Mr. Arrington's partner in the fund is Patrick Gallagher, who has been a
partner at VantagePoint Capital Partners since 2008.

Mr. Arrington wasn't immediately available for comment. He posted a message on
Twitter after news of the fund broke: "slow news day."

Mr. Arrington, a former lawyer who is known to be well connected in Silicon
Valley, started TechCrunch in 2005. The site built up a following for its
coverage of young tech companies.

Long an angel investor himself, Mr. Arrington announced on TechCrunch in 2009
that he would stop making investments in start-ups due to a perceived conflict
as both publisher and investor. It's "a weak point that competitors and
disgruntled entrepreneurs use to attack our credibility," he wrote at the
time.

But in April this year, after AOL acquired TechCrunch, Mr. Arrington announced
he was investing in start-ups again, while also becoming a limited partner in
venture funds Benchmark Capital and SoftTechVC.

Mr. Arrington has often said that transparency and full disclosure keep things
above-board when his blog writes about companies he has some financial stake
in.

~~~
bluedanieru
>Mr. Arrington has often said that transparency and full disclosure keep
things above-board when his blog writes about companies he has some financial
stake in.

Isn't this sort of thinking half-bullshit? It's certainly more ethical than
writing a glowing review of some startup without revealing you have a stake in
it (which borders on criminal), but the truly ethical course of action is to
not write about it at all.

A statement admitting you are biased doesn't negate your bias, and leaving it
to your readers to decide if you're sincere or full of shit doesn't make for
good writing.

~~~
joelmichael
This conflict of interest is precisely why he resigned. I'm not convinced a
personal stake necessarily makes for uninteresting writing, though.

~~~
EwanToo
Fred Wilson at <http://www.avc.com> writes very interesting stuff about
startups he has a stake in, showing it's possible, but it definitely has to be
considered whenever you read something by him.

~~~
djb_hackernews
Thats a personal blog. I would hope and expect a VC to write about the
companies he has invested in on his personal blog. Cheerleading and all.

------
guelo
Arianna is now saying that Arrington will not have writing privileges and that
he no longer works for Techcrunch at all.
[http://www.businessinsider.com/mike-arrington-no-longer-
work...](http://www.businessinsider.com/mike-arrington-no-longer-works-for-
techcrunch-2011-9)

------
flocial
The title is sensational. He's just relinquishing editorial responsibilities
and not all writing privileges so he can run a AOL-funded venture capital
fund. The question is will he be able to leverage his connections and
influence to perform as a capable fund manager?

~~~
redthrowaway
His connections will come in handy, his judgement remains to be seen. It'll be
interesting to see how much journalistic independence TC maintains, and how
favourably his startups are covered compared to his competitors. I never got
the impression that Arrington was the kind of guy to play fast and loose with
ethics, but I could very well see him refraining from pulling an Arrington on
his own startups, in the way he has on others.

Interesting times.

------
Kavan
AOL = TechCrunch and AOL = CrunchFund (as it is AOL's capital seeding the
fund)

So even if the fund had a different name, and Arrington doesn't work for AOL
directly, there is still a conflict of interest. As Paul Carr said in his
article, are TC journalists likely to write a really negative piece on a
CrunchFund company knowing that Tim Armstrong ultimately runs both?

Would the Wall Street Journal or the New Times start an investment fund and
invest in the exact companies they are reporting on? IMHO they would not, as
they realise their core business's need for independence.

If AOL want to follow through on their strategy "AOL is planning on being the
largest high quality content producer for digital media." they need to realise
that they are a media business and so need to follow the same rules basic
rules for good journalism as every one else in their industry.

IMHO this is a very poor decision by Armstrong. For another glamorous dabble
in the VC world where he will probably make about 10% ($2M) per annum, he
could be betting the entire AOL business.

Not much upside and a whooooole lotta downside = bad trade.

------
cft
Hopefully, Hollywoodization of the Silicon Valley will slow down as the
Techcrunch hype machine falls apart.

~~~
dasil003
LOL! It's not TechCrunch, it's the money.

~~~
dasil003
no rebuttals though.

------
ig1
_bangs head on wall_

I've got a draft article I was writing for my blog arguing that Arrington
should resign because his conflicts of interest make his role as editor of TC
untenable.

Among other reasons I was arguing that Arrington has to disclaim his
investment in any article about a competing firm, however since his investment
in SV Angels he's now invested in a number of firms which are in stealth mode,
which means in practical terms that it's impossible for him to meet his
obligations.

~~~
pak
Well publish it then and post it here! Just change the byline to "I'm glad
Arrington resigned..." and all the same arguments follow. A lot of the stories
that frontpage on HN seem to be opinionated follow-ups to recent news events.

------
ayanb
He could serve up some drama, but one thing most people will agree on, he has
always cheered for and egged on startups and the ecosystem. Simply for that, I
wish him good luck.

------
rmason
Well when there's a website with a pool predicting your departure the
crowdsourced consensus was Arrington wouldn't be at AOL long:

<http://www.whenwillmichaelquit.com/>

------
petercooper
But staying with TC, notably. As he said after the sale:

 _So we begin another journey. I fully intend to stay with AOL for a very,
very long time. And the entire team has big incentives to stay on board for at
least three years._

However, I rather hope Michael's "dream" comes true instead:
[http://peterc.org/blog/2011/381-michael-arringtons-dreams-
of...](http://peterc.org/blog/2011/381-michael-arringtons-dreams-of-a-blog-
for-true-startups.html) ;-)

~~~
troymc
"... [Mike would] like to go start another blog that does nothing but write
about startups, like the true startups, really every one, again for the core
audience."

Jason Calacanis started the LAUNCH blog to do something similar:
<http://www.launch.is/>

I subscribe to LAUNCH, and while not every story interests me, I'm sure every
story will interest _someone_ (e.g. competitors or potential business
partners).

------
bkrausz
Strange that this is only 11 months since the acquisition, I would have
assumed he would leave at a 1 year vesting.

~~~
bradly
He isn't leaving; he just won't be the editor.

~~~
razin
I think he is. Leaving TechCrunch that is. If I'm reading the article
correctly, he will be full-time at CrunchFund and serve as a contributor to TC
(like Vivek Wadhwa and Rocky Agarwal does from time to time).

~~~
jackowayed
But AOL is the primary LP in the fund. I'm sure they worked something out.

~~~
benologist
Perhaps this is what they really bought TechCrunch for?

~~~
a3camero
I wouldn't think so because why did they have him stay so long as editor at TC
instead of just switching over to the VC fund?

------
jetbean
I have to ask, why is this important?

~~~
wanorris
Both TechCrunch and VC can be pretty important to startups, and this story is
about both.

------
johnx123-up
Will the CrunchFund going to be a competitor for YC?

~~~
MatthewPhillips
In the same way the Crunchpad is a competitor to the iPad.

------
gwern
Companies investing in other companies always strikes me as weird, and
investing in a venture capital seems even weirder.

Companies have a fiscal responsibility to deliver as much money as possible to
their shareholders, do they not? So if AOL is giving Arrington a few million
dollars, that's money AOL shareholders are not seeing; it's only justifiable
if AOL thinks Arrington will use the money to outperform the market (otherwise
just invest in the market or return to shareholders) or there will be some
friends-with-benefits deal worth millions to make up for Arrington's lack of
edge. Neither one seems all that likely.

------
suprgeek
When AOL acquired TC, I get the feeling that the clock had started counting
down for Michael Arrington. Not because AOL wanted to get rid of him, but more
because of his need to be disruptive which was being reined in to some extent.
The "loose" cannon tag is well earned to some extent.Should be interesting to
see some of Arrington's larger investments as a VC.

------
nkeating
Cant say that I'm a fan of his tactics, but the Man's seemingly omnipresent
influence on the tech world is undeniable.

------
itsnotvalid
Aren't we expecting this? Editorial independence is a good thing here, so
really no surprise here.

------
par
Didn't he report some alleged collusion last year among some silicon valley
angels? Perhaps he feels this is his way of competing and creating a true
angel market. I'm interested to see where this goes, more startup money can
only be good for us!

------
wslh
Funny that their current e-mail contact is: crunchfund@gmail.com on CrunchBase
page: <http://www.crunchbase.com/financial-organization/crunchfund>

------
djd
Not big a news as the Title suggests. Gist: He quit as editor and started a
seed fund

------
breck
Glad to see he's still writing for TC. If I notice MA's name in the byline, I
usually read it.

~~~
technoslut
Arrington's articles are always interesting but is it best for journalism if
he is still there?

There's no question that he still carries weight but he has been investing in
startups for some time now. He may make for interesting reading but his
motives will always be questioned.

I still don't know why AOL is interested in investing in his latest startup.
Has the barrier of personal interests become so dissolved that this is glossed
over?

------
bshells
$20 million. Who said we are having a eco crunch?

------
mrmaddog
Even though I hope M.G. Siegler becomes the next head of TechCrunch, I have a
feeling that AOL will view this as it's chance to take command, and put one of
its own on top. Sigh...

~~~
megablast
I like MG, but maybe someone a bit more balanced.

~~~
wuster
and someone more concise =)

------
puredemo
Good on Mr. Arrington. I'm looking forward to seeing what he does in the next
few years.

He can be polarizing, but his journalism and analysis have always seemed spot
on to me.

