Last Updated Sep 25, 2010 1:18 AM EDT
Arrington was shocked, simply shocked. (And, to be fair, if the claims are true then, as he suggested, there could be some serious breaches of federal law.) Angel investor Ron Conway felt out of place and was uncomfortable with such "self serving factors" as "ego satisfaction and 'making a buck.'" I'm simply shaking my head. Given the insular and inbred nature of the Silicon Valley tech crowd, how could this possibly surprise anyone?
The area has become a not-so-productive high tech machine in which the same people do business with each other all the time. Companies try to get attention from the same web sites. Investors and would-be entrepreneurs go to the same conferences and pull from the same talent pool â€" to such an extent that big tech companies allegedly have agreements not to poach each other's employees. (Well, apparently other than extremely well-paid executives, because if there isn't mobility, how do top managers keep their salaries up?) I think former Intel (INTC) CEO Andy Grove's observation that the Valley has forgotten the necessity for companies to ultimately scale is just another aspect.
As the financial markets have shown all too well, when the established good-old-boy network is too entrenched, the members can become jaded and start directly playing the system for their own ends, rather than working the market correctly so that personal benefits flow out based on the value people can add. Too much power into too few hands with too little new blood results in myopia and the disaster of a Mr. Magoo put behind the wheel of a Ferrari.
In the Valley, there is a level of blinding self-obsession that can make your jaw drop open, if you look from the outside. For example, Arrington mentioned that the super angels "together account for nearly 100% of early stage startup deals in Silicon Valley." They do? So what? As my BNET colleague Ben Popper argued, whatever the ten individuals cough up each year is likely chicken feed in the face of the estimated 500,000 angel investors nationally that collectively invest $20 billion a year.
High tech entrepreneurs have to get really smart really fast. Folks, the investors aren't in it for your own good. No matter how much you think that they should want to further the markets and industries that have helped them get where they are, most of them couldn't care less. They are interested in what you can do for them, and are willing to suck out as much of your dreams and future as they can talk you into signing away.
If you're not caught up in all the turmoil -- and hoping that some of the involved parties will either fund you or write about you -- there is a fair amount of ironic humor to be had. In fact, someone did a classic "Downfall" Hitler parody. The language is often adult and turgid with a stuffing of Silicon Valley-speak, but laugh-out-loud funny:
Of course, as happens with all true humor, there is always some truth. In the case, the amount is uncomfortably high. That might explain the flurry of high profile back biting and recriminations. To quote Downfall, "Fegelein! Fegelein! Fegelein! Fegelein!"