Michael Arrington, the founder and co-editor of TechCrunch, has created a venture capital fund to invest in startups.
Arrington is resigning from TechCrunch, one of the most influential tech blogs in the US, to head the $20 million CrunchFund. According to a Fortune report, TechCrunch’s owner, AOL, and several venture capital firms will back the new investment fund.
The New York Times notes that CrunchFund will invest in some startups covered by TechCrunch, thereby breaking one of journalism’s cardinal rules—avoid any conflict of interest.
But Arrington says that TechCrunch’s standards of transparency and disclosure should dispel any ethical concerns.
“Friendships and marriage are far more potent than financial conflicts,” Arrington is quoted as saying in the Times. “I firmly believe that the reason we are a popular site is because we have built reader trust, and the only way to build reader trust is not to trick them. That’s the most important thing to me."
Arrington founded TechCrunch in 2005. AOL bought the company last year for a reported $30 million.
