Michael Arrington Resigns From Techcrunch

If the paywall is affecting you:<p>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.<p>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.<p>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 &#38; 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.<p>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.<p>Mr. Arrington's partner in the fund is Patrick Gallagher, who has been a partner at VantagePoint Capital Partners since 2008.<p>Mr. Arrington wasn't immediately available for comment. He posted a message on Twitter after news of the fund broke: "slow news day."<p>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.<p>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.<p>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.<p>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.

Arianna is now saying that Arrington will not have writing privileges and that he no longer works for Techcrunch at all. <a href="http://www.businessinsider.com/mike-arrington-no-longer-works-for-techcrunch-2011-9" rel="nofollow">http://www.businessinsider.com/mike-arrington-no-longer-work...</a>

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?

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

AOL = TechCrunch and AOL = CrunchFund (as it is AOL's capital seeding the fund)<p>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?<p>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.<p>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.<p>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.<p>Not much upside and a whooooole lotta downside = bad trade.

<i>bangs head on wall</i><p>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.<p>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.

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.

Well when there's a website with a pool predicting your departure the crowdsourced consensus was Arrington wouldn't be at AOL long:<p><a href="http://www.whenwillmichaelquit.com/" rel="nofollow">http://www.whenwillmichaelquit.com/</a>

But staying with TC, notably. As he said after the sale:<p><i>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.</i><p>However, I rather hope Michael's "dream" comes true instead: <a href="http://peterc.org/blog/2011/381-michael-arringtons-dreams-of-a-blog-for-true-startups.html" rel="nofollow">http://peterc.org/blog/2011/381-michael-arringtons-dreams-of...</a> ;-)

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

I have to ask, why is this important?

Will the CrunchFund going to be a competitor for YC?

Companies investing in other companies always strikes me as weird, and investing in a venture capital seems even weirder.<p>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.

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.

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

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

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!

Funny that their current e-mail contact is: crunchfund@gmail.com on CrunchBase page: <a href="http://www.crunchbase.com/financial-organization/crunchfund" rel="nofollow">http://www.crunchbase.com/financial-organization/crunchfund</a>

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

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

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

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...

Good on Mr. Arrington. I'm looking forward to seeing what he does in the next few years.<p>He can be polarizing, but his journalism and analysis have always seemed spot on to me.