Michael Arrington Launches VC Fund

Michael Arrington, editor of TechCrunch, has raised $20mm to invest in startups, about half of which came from AOL. Arrington has been escalating his technology investments for a while, taking an LP position in an early stage fund and then investing directly in startups.

The official launch is news, but rumors surfaced earlier.

Arrington has attacked traditional journalistic ethics for ignoring non-financial considerations (plenty of tech journalists are married to founders and executives at the companies they report on). But this raises his critique to the level of performance art. Arrington has connections and foresight; writing about tech companies always seemed like a waste when he could be investing in them.

Here’s an alternative theory, though: what if this wasn’t Mike’s idea at all? AOL has started investing in startups. And if Tim Armstrong really wanted a PE buyout, he might have aimed for one earlier in the process. Having their star media property tied up in a bunch of confusing, conflict-ridden startup investments.

It’s also weird to see VCs as limited partners in a VC fund. That’s the kind of thing the VCs’ LPs might find confusing (unless the investee is Y Combinator).

There are plenty of unanswered questions about this launch as described.