The secret venture capital cabal Mike Arrington faced off against in San Francisco bar last night might be in serious trouble. But the conspiracy's hapless incompetence is actually rather comical.

Arrington dropped a bombshell of a post on TechCrunch late Tuesday, saying he walked in on a hush hush meeting of angel investors who together fund "nearly 100% of early stage startup deals in Silicon Valley." The group, he believes, may be guilty of collusion and price fixing; several members told Arrington the cabal discusses how to hold down the valuations members assign to early stage companies; how to block venture capitalist from investing in companies that outgrow the cabal; and how to undermine the successful startup incubator Y Combinator, which invests very small amounts in ideas too underdeveloped for angel funding.

Arrington, a former lawyer at the high powered Silicon Valley firm Wilson Sonsini, adds:

This isn't minor league stuff. We're talking about federal crimes and civil prosecutions if in fact that's what they're doing. I had a quick call with an attorney this morning, and he confirmed that these types of meetings are exactly what these [collusion and price fixing] laws were designed to prevent.

That's very somber. Sadly, it's hard to get too worried about these guys given their total inability to keep their big secret conspiracy at all under wraps. Not only did someone privy to the scheme leak the exact location of the group meeting, a public wine bar (!) and restaurant, to the publisher of TechCrunch, but several members of the cabal dished the group's darkest "secrets" to Arrington after the conspiracy meeting took place.

And when Arrington crashed the meeting, did the conspiracy play it cool? Not by a mile:

Me: Hey!
Person who was talking: Oh, oh no.
Me: Hi. I heard you guys were here and I wanted to stop by and say hi.
Them: dead silence.
Me: so….
Them: Deafening silence.

But the cabal's most comical trait has to be its policy on taking notes. It seems notes are very much encouraged — so much so, one participant tells Arrington, 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."

A wiki. For the conspiracy.

Oh, San Francisco. You do not wear dark, evil plots well. Although there is a certain comedy value in your diligent application of open information-sharing systems to shadowy conspiracies. If you know anything about this Wiki of Secretly Taking Over the World, do clue us in. We're already chuckling.

[Pics: Arrington by Erik Solheim/Flickr; Bin 38 via]