Mike Arrington to leave TechCrunch for CrunchFund

Faith Merino · September 2, 2011 · Short URL: https://vator.tv/n/1e81

Arrington gets an all-star cast of VC partners to build up his new fund

TechCrunch founder Michael Arrington has faced criticism in the past over his investing activity and possible conflicts of interest—since, as the co-editor of TechCrunch, he covers the same companies he’s investing in.  But the uproar has reached a crescendo with Arrington’s latest project: CrunchFund, a venture capital fund that will invest in early stage startups.

Even more startling are the names associated with the new fund.  AOL has already invested $10 million into the new fund (which will operate independently from AOL Ventures), according to the New York Times.  Other partners include major VC firms Sequoia Capital, Kleiner Perkins Caufield and Byers, Greylock Partners, Redpoint Ventures, Austin Ventures, and Accel Partners.  So, basically, all of Silicon Valley is backing the new fund, which is also receiving individual investments from Kevin Rose, Yuri Milner, Ron Conway, and partners at Benchmark Capital and Andreessen Horowitz. 

And all of their immediate and obscure relatives are also chipping in, along with Ben Bernanke and the horse who played Sea Biscuit.

No, I made that up.

“TechCrunch will get some real deal flow from entrepreneurs that we would otherwise not see, because they have established a prominent position as the SV/Tech industry information feed,” Greylock’s Reid Hoffman told Kara Swisher of AllThingsD.  “As many tech entrepreneurs read it — both within Silicon Valley and globally — and view the information news feed to be their target for announcing themselves to the world, CrunchFund will have access to deal flow to these diverse and early stage companies. Some of these companies will be the kind of early stage companies with billion-dollar potential that Greylock invests in.”

Props to Hoffman for being honest about the fact that CrunchFund will be a separate unit from TechCrunch in name only.

Patrick Gallagher of VantagePoint Venture Partners will be Arrington’s partner, and the two are reportedly in the process of raising $20 million to get the ball rolling.  

Arrington has previously come under fire for his investment activity.  Formerly a Silicon Valley attorney, Arrington was an occasional angel investor before creating TechCrunch in 2005.  He continued to invest in companies, despite the obvious conflict of interest, but in 2009, he announced his decision to stop investing.  Aaand then TechCrunch was acquired by AOL (for a reported $25-$30 million) in September 2010.  A few months later, Arrington announced a change in his investment policy: he would continue to invest in startups while simultaneously writing and editing for TechCrunch, starting with a couple of new projects from Shawn Fanning and Kevin Rose.

It isn’t clear what Arrington’s role with TechCrunch and AOL will be from here on out.  Reports initially claimed Arrington would stay on as an AOL employee and while he would no longer be an editor for TechCrunch, he would continue to write for it.  But later, AOL told Business Insider that Arrington will be severing all ties with TechCrunch.


Image source: mediabistro.com

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