Last night I met a friend at Rosewood on Sand Hill Road and it was entertaining watching the VCs and social networking.
The bar area was packed with the folks from Sand Hill Road - VCs, I Bankers and a few cougars....
For those of you who don't know what a cougar is.
What is a Cougar?
Cougars are Women in their PRIME: independent, sexy and wildly successful. They enjoy men that are youthful, fit with the same zest for life. Cougars are classy, confident women that already possess many of the finer things in life — but now want the young, hot guy to go with it.
What is a Cub?
To snare a true Cougar a man needs to be youthful, fit, unintimidated and of course sexually driven! These men can range from athletes to intellectuals, and from technologists to entrepreneurs and all points in between; they can come in all shapes and sizes, but one thing they have in common is the desire to possess a sexually charged older woman.
But, to get serious discussions done, you don't want Cougars in the scene. Michael Arrington of Techcrunch writes on a discovery he made going to a bar where the super elite angel investors were meeting.
Yesterday I was tipped off about a “secret meeting” between a group of “Super Angels” being held at Bin 38, a restaurant and bar in San Francisco. “Do not come, you will not be welcome,” I was told.
So I did what any self respecting blogger would do – I drove over to Bin 38, parked my car and walked in.
And here is what he discovered.
This group of investors, which together account for nearly 100% of early stage startup deals in Silicon Valley, have been meeting regularly to compare notes. Early on it was mostly to complain about a variety of things. But the conversation has evolved to the point where these super angels are actually colluding (and I don’t use that word lightly) to solve a number of problems, say multiple sources who are part of the group and were at the dinner. According to these souces, the ongoing agenda includes:
- Complaints about Y Combinator’s growing power, and how to counteract competitiveness in Y Combinator deals
- Complaints about rising deal valuations and they can act as a group to reduce those valuations
- How the group can act together to keep traditional venture capitalists out of deals entirely
- How the group can act together to keep out new angel investors invading the market and driving up valuations.
- More mundane things, like agreeing as a group not to accept convertible notes in deals (an entrepreneur-friendly type of deal).
- One source has also said that there is a wiki of some sort that the group has that explicitly talks about how the group should act as one to keep deal valuations down.
At least two people attending were extremely uneasy about the meetings, and have said that they are only there to gather information, not participate.
So what’s wrong with this?
Collusion and price fixing, that’s what. It is absolutely unlawful for competitors to act together to keep other competitors out of the market, or to discuss ways to keep prices under control. And that appears to be exactly what this group is doing.
There are many things that occur behind the scenes.
Back to the Rosewood story my friend says the valets are tipped to check out the bar call/text the Cougars what VCs (cubs) are in the bar, and they know whether it was worth the trip. When I left the bar after my meeting at 7:30p the bar was 50% women. Doesn't sound like the data center conference bar scene. :-) Off to Data Center Dynamics Chicago and Data Center World LV in the next two weeks. But, one more trip to a VC today for lunch.
BTW, my friend and I are not Cougar targets (cubs) as we are both over 50, our wives are good friends, I am sure I'll hear it when my wives friends read this post, and the dumbest thing I could do if I wanted to keep this secret is to blog about a VC cougar bar. But, it does make for entertaining reading.