September 24, 2010

The Daily Start-up: ‘AngelGate’ Escalates

WSJ Venture Capital Dispatch blog, Russell Garland

This morning’s roundup of the latest venture capital news and analysis across the Web:

In the once-hot clean-technology space, start-ups are having trouble attracting investors even as older companies such as BrightSource Energy eye IPOs. Reuters reports that venture firms are putting less money into these businesses, prompting concern about financing for the next generation of clean technology. Meanwhile, CalCEF Clean Energy Angel Fund, launched in 2008 by non-profit California Clean Energy Fund, wrapped up at $11 million, well below its $20 million target. General Partner Susan Preston told VentureWire that the recession caused investors to pull back and that the fund faced additional hurdles as a small, first-time investment vehicle targeting riskier early-stage deals. She also said CalCEF’s fund-raising difficulty indicates that there won’t be enough money for new ideas as capital gravitates to proven technology.

Venture-backed consumer Internet companies such as Facebook and Zynga have been buying companies and now LinkedIn Corp. has joined the fray. It made its second acquisition in the past two months, purchasing ChoiceVendor Inc., which was backed by Battery Ventures. Read more in VentureWire.

AngelGate, as it’s become known, just won’t go away. The brouhaha erupted after TechCrunch founder Michael Arrington uncovered a meeting of top angel investors in a San Francisco restaurant, Bin 38. Arrington blogged about it, alleging angel collusion. Now angel Ron Conway, who wasn’t at the meeting but whose SV Angel partner David Lee apparently was, reportedly has weighed in with an email blast at the group. Venture capitalist Mark Suster says he doubts collusion is happening in the industry, but explains that entrepreneurs can help prevent it by try to “control information flow where you can.” And, yes, there’s even a Hitler video. Does anyone else think that this kind of craziness has a bubbly 2000-vintage flavor?

Perhaps seeking a saner atmosphere, Twitter angel investor Chris Sacca pays a visit to his alma mater, Georgetown University, to tell students how to get ahead. The Hoya has more.

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