It looks like TechCrunch could soon have to deal with big conflict of interest issues thanks to its editor's recent investments.
Michael Arrington, the blog’s founder and editor, announced in a post on Wednesday that after a two-year hiatus from making angel investments in tech startups—which he stopped because of “distracting” accusations of conflicts of interest from competitors—he has resumed actively investing in tech startups and become a limited partner in two venture funds.
The problem is that if Arrington is considering investing in a startup, he and his blog can’t cover the company. “There’s a period of time with any investment when I know an investment is possible or likely, but it can’t be announced yet,” Arrington explained. “During that time I don’t write about the startup at all because I can’t disclose the investment. When another writer wants to break a story, we may have to hold that story, or it becomes a forcing function in announcing sooner.”
“When these investments are complete,” he continued, “in a few months, there’s a very good chance that I’ll be a direct or indirect investor in a lot of the new startups in Silicon Valley, and that will mean that there will be financial conflicts of interests in a lot of my stories—either because I write about those companies or write about a competitor, or don’t write about a competitor.”
But Arrington thinks that the situation will “all be fine.” He said that he won’t hesitate to criticize companies that he has invested in and will praise successful companies even if he hasn’t invested in them, or has invested in a competitor.
Other tech sites will probably blast TechCrunch over this issue (one blogger has already predicted that "readers might grow to mistrust TechCrunch and switch their allegiance"), but Arrington said not to worry—it’s just because they’re jealous.