On the main yes. But I imagine they would all jump on a scoop to bring down the goverment also considering the amount of fear both the politicians and media have pedalled over the last year
I’ll take that as a backtrack and acceptance that despite your usual tinfoil hat ranting mainstream media did break the story 
No backtrack here.
Gas to see you out spinning like a maniac as usual when FG make tits of themselves.
I’m not spinning - I’m just applying some facts to your usual waffle. As ever - you don’t react particularly well to being confronted with reality or being called out but that’s on you not me.
I’ll leave you now to go back to your exhaustingly-angry daily existence. Ciao
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You are spinning. The MSM don’t seem interested to get to the bottom of this.
Compare and contrast the way they pushed and pushed and pushed with the SF database non story.
It’s gas the way you get triggered by FG and their spin doctors being called out.
Web Summit claims it lost $10m after ex-director ‘secretly set up fund’
Good article on the Currency last week about it. He’s out to get them because they cried foul of his Twitter antics.
Reading between the lines. They just cut Paddy out, not much he can do about it going on what’s there. The perils of being a cunt I guess
Can you post it up
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It all really began on an ivory-coloured leather couch in Manders Terrace. It was in that five- bedroom house in Ranelagh in Dublin 6 that a corporate structure was put in place to hold what is today described by Forbes magazine as “the best technology conference on the planet”.
Irish entrepreneur Paddy Cosgrave had founded the event called the Web Summit in 2009. In June 2010, Cosgrave invited his school friend from Glenstall Abbey, David Kelly, to join the company. Kelly had been working in financial services with Citigroup but, in the depth of the financial crash, jobs for recent graduates were few and far between.
Kelly took a room in a house on Manders Terrace that was rented out by Michael McDowell, a senior counsel and former government minister. Cosgrave lived in a bedroom on the top floor overlooking a small park, while Kelly lived in another room below him. In September 2010, Daire Hickey, a journalist from Cork, joined the business.
Web Summit already had some momentum but, as it headed into 2011, it took a big step up. The event tripled in size when it rented out the RDS in Dublin 4 and attracted then emerging international tech stars like Jack Dorsey, the co-founder of Twitter, and Chad Hurley, the co-founder of YouTube.
After the success of 2011, a decision was taken to incorporate a company called Manders Terrace Ltd, named after the street on which Cosgrave and Kelly lived, to run the Web Summit business. Cosgrave, Kelly and Hickey incorporated this company with 81 per cent of its shares going to Cosgrave as chief executive and original founder. Kelly took 12 per cent and Hickey 7 per cent.
Over the next decade, Web Summit would grow exponentially, leaving Dublin for Lisbon in 2016 and hosting a range of spin-off events around the world. Web Summit became a huge success story, attracting 80,000 visitors at its peak pre-Covid-19 in Lisbon. Megadeals were done at the conference as it became a place for matchmaking between the world’s hottest new companies and the biggest venture capital funds. It was where Revolut met Index Ventures; Uber met Sequoia; Trello was acquired by Atlassian, and so on. There were lots of smaller deals too that helped tiny start-ups gain a foothold.
All was going really well. Sure, Covid-19 made a big impact in 2020 but Web Summitt adjusted and ran a successful event online. As summer came around, the Web Summit team started to gear up to hold a physical event this November. Cosgrave was in Lisbon yesterday with Economy Minister Pedro Siza Vieira to discuss the event. The Web Summit, he said, would attract 40,000 visitors with 1,000 speakers and 1,250 startups all scheduled to attend. More would have come but ticket sales are still limited by Covid. Cosgrave said the event would be the “largest business conference in the world.”
Behind the scenes, however, a big row was brewing between Paddy Cosgrave and David Kelly. In the last 24 hours, court filings in the United States and Ireland have revealed the scale of the fallout between the two former friends of many decades.
A flower that never fades
Paddy Cosgrave and Dave Kelly had had the idea to set up a venture capital fund in the back of their minds for years. As far back as 2013, Cosgrave hinted to Adrian Weckler in The Irish Independent that he was considering becoming an investor with Kelly. In the years afterwards, they did invest in other tech projects but it was on an ad hoc basis with their own money. They could see, however, that there was an opportunity to create a fund that would leverage Web Summit’s extensive connections both to investors and emerging start- ups.
In 2017, they started to work on Amaranthine, a fund named after an exotic flower that never fades. Patrick Murphy, a former venture investor with Universal Music, joined the fund as a third co-founder. A 20-page funding deck prepared to raise money for Amaranthine drew heavily on its connections to Web Summit. Its team has “curated the world’s leading community of tech founders; and invested & advised on $ billions of tech deals,” the deck notes, adding that these networks give it an “unfair advantage”.
In this first deck, Patrick Murphy is described as managing partner while David Kelly is the general partner and Paddy Cosgrave is described as the Web Summit’s founder and CEO. The deck is described as “proprietary to Web Summit” in the small print.
Amaranthine Fund I closed $30 million initially and an update circulated to its investors in 2020 gives an insight into how well the fund quickly began to perform. After 24 months, it had an internal rate of return of 115 per cent and was valued at 2.7 times its marked value.
The fund was not fully deployed but, already, it had big hits backing Hopin, an events software unicorn, Pointy, which was sold for $160 million to Google, and Standard Cognition, a pioneering AI-powered checkout for retailers. Not every investment was a success, of course, but the fund had big wins by any measure using its “advantage”, which is described in its pitch deck as being the Web Summit itself with “every team” within the organisation contributing to the success of the fund.
On page 13 of the 38-slide deck, Amaranthine said it was planning to deploy a second fund in 2021. The plan was to “double down on successful founder-led strategy”. It was full steam ahead, or at least that is how it appeared. Behind the scenes, however, a serious row was brewing between Cosgrave and his former school friend Kelly.
On Tuesday night, papers were filed in the Superior Court of California. It was a summons sent by Manders Terrace Ltd, a company controlled by Paddy Cosgrave, to David Kelly and Patrick Murphy and various corporate entities including an LLC called Semble Partners. On Wednesday, Cosgrave filed an affidavit in the High Court in Dublin suing Kelly on the behalf of Manders Terrace.
This affidavit alleges: “These proceedings concern several repeated and very grave breaches of the fiduciary obligations of the Defendant (Kelly), a former director and current minority shareholder of Web Summit, to the Company, by which the Defendant engaged in the co-
option of very valuable Web Summit commercial opportunities for his own personal gain.” The filing claimed Kelly had “repeatedly misrepresented his intentions to me and to the Plaintiff (Manders Terrace), misleading us on repeated occasions and causing very significant losses to the company.”
Cosgrave’s affidavit begins by setting out the background to the case as he sees it. He describes how Amaranthine was founded with the intention to “leverage” Web Summit’s resources to create its first fund along with Patrick Murphy. In May 2021, Cosgrave says Kelly and Murphy “arranged for my removal” as managing partner and general partner of Amaranthine I. This made Kelly and Murphy its “sole managing members”.
Cosgrave claims that he was ousted “without cause” but that the fund itself from its “inception” relied upon Web Summit’s “capital, investment, brand name, connections, goodwill, assets and intellectual property”. He says Web Summit put $2 million into the first fund in return for 30 per cent of its realised profits. He says Murphy put in $250,000 while Kelly made no personal capital contribution.
Cosgrave says Kelly was appointed by Web Summit to the fund with “60 per cent of the carried interest to the general partner (30 per cent to each of [Kelly] and to Web Summit)”. Cosgrave says both Kelly and Murphy had “limited relevant experience.” He adds: “The driving force behind the success of the fund was Web Summit” and the “majority of the fund team” made up of Kelly and two employees called Chris Murphy and Luke Byrne were based “just a few feet from my office.”
Web Summit, Cosgrave says, was essential to Amaranthine Fund I being able to raise $25 million to invest. Cosgrave says he had made “critical contributions” in getting Amaranthine access to investors and startups. He says that the wider Web Summit team also made important contributions to the fund – and that Web Summit paid 100 per cent of Kelly’s salary until January 2020, and 50 per cent until April 30, 2021.
“Web Summit was integral to the fund’s creation, operation and success,” Cosgrave says, adding that various agreements were in place governing the various relationships involved.
“A follow-on fund that improperly usurped Web Summit’s brand, resources and assets.”
Paddy Cosgrave’s affidavit
Paddy Cosgrave then turns to the thrust of his case. He alleges that there was a “concerted effort of several months by Mr Murphy and (Kelly) to mislead Web Summit and myself, to breach an agreement with Web Summit… and secretly to establish a follow-on fund that improperly usurped Web Summit’s brand, resources and assets”.
Cosgrave says he is suing Kelly, Murphy and related corporate entities in the United States to prevent them from “violating their duties” and “improperly profiting” from Amaranthine’s track record and Web Summit’s assets and reputation.
Cosgrave alleges that Kelly “breached his statutory fiduciary duties to the company” by working on a plan to come up with his own fund. All of these allegations are denied by Kelly, Murphy and their associated companies, and we will return to their response later on.
Cosgrave then details how Amaranthine began to look at raising its second fund in Autumn 2020. He says the plan was that this fund would be $50 million. Cosgrave says that the plan was not to raise a second fund until the firm had spent 70 per cent of its first fund.
He also says he proposed “adjustments” to the carry allocation to reflect the significant contributions of Web Summit employees who identified startups to invest in and were “integral” to the success of the first fund. According to Cosgrave, Kelly was “amenable” to an adjustment initially but he claims Murphy “did not agree.”
Cosgrave claims Web Summit’s general counsel Adam Connon spoke to Murphy about this adjustment but Murphy “denied any knowledge of negotiations”. Things then broke down, and Kelly and Murphy declined to negotiate further in respect of a change in carried interest in Fund II, Cosgrave says. A loggerhead had emerged.
“Time to pull the chord”
In his affidavit, Paddy Cosgrave says he was told by Kelly “at the same time” that he wished to leave his role as director of Web Summit and his role with Amaranthine. He said Kelly told him in a text message: “I am going to make a simple life for myself. Start my own small business or work for someone else will need to figure that out. Thanks for everything but its time to pull the chord.”
Kelly continued his role with Amaranthine Fund I, but he not going to work further with Cosgrave. Once Kelly was out of raising fund II, Cosgrave says, this meant so too was Murphy. Web Summit then commenced work he said to set up its second fund without either Kelly or Murphy.
In May 2021, Cosgrave says he found out that Kelly and Murphy were working on a second fund together. “I was absolutely flabbergasted and I realised that the defendant had misled me and Web Summit over the course of many months but – more to the point – had acted in his personal interest in disregard of his role as director of Web Summit and to the detriment of Web Summit,” Cosgrave alleged.
He says this was not something Web Summit “could let pass” and that it had caused his business “very considerable loss”. Cosgrave alleges that Web Summit’s “data, brand, goodwill and intellectual property” were all used in raising this different fund.
Cosgrave claims that Kelly and Murphy had “covertly” set up their own fund and obtained binding commitments from certain of Amaranthine I’s existing investors. He said this was a “breach of fiduciary duty,” by Kelly to the company. All of these allegations are denied by Kelly and Murphy, as we will see later on.
Cosgrave says the initial name of their new new fund was “Semble Fund II” but “Semble” is a Web Summit brand and mark. He also claims that they had gone to raise money for their new fund “based on misinformation” about their contribution to Amaranthine I.
Cosgrave says he believes a report in The Financial Times supports this claim. He says the FT quoted Draper Espirit as saying on June 14, 2021, it had invested in various funds including “Amaranthine Fund II.” Cosgrave said he believed this was evidence to support his claims.
He says that Web Summit had also discussed with Railpen, a large fund representing American railways pensions if it would consider investing in its second fund. “Web Summit was informed that it was not in a position to invest as it had fully deployed its capital in this sector following an investment in the Semble fund,” Cosgrave says. He adds he believes this was to the “detriment” of Web Summit.
Cosgrave alleges that there had been a “brazen snatching” of relationships with investors “that it had been agreed would only be available to Web Summit to exploit”. All of these allegations too are denied by Kelly and Murphy.
Cosgrave then sets out his timeline of when various events took place. This included incorporating Semble in Delaware on May 7, 2021; and acquiring the website Semble.vc and an associated Twitter handle on April 27, 2021. Cosgrave says Web Summit had used the Semble brand since 2017, and he says Kelly had been an employee and director of Web Summit until just weeks before the new entities were incorporated.
Cosgrave says he believes the name Semble was chosen to “exploit” its association with Web Summit and that the new Semble.vc website said “Amaranthine is now Semble” and included the track record of the first fund. Cosgrave says his removal as general partner of Amaranthine on May 26, 2021, meant he was no longer able to see what was going on between it and its investors.
He alleges all of this actively “interfered” with Web Summit’s plans to raise a follow-on fund. He says that it took until July 2021 for Web Summit to halt the use of the name Semble and that a series of legal exchanges then occurred between solicitors for both parties.
Cosgrave notes that Kelly said in this correspondence he had behaved “properly.” He says he sought various undertakings from Kelly but did not receive them forcing him to take legal action.
He alleges that Kelly asserted in correspondence that he was the “victim of shareholder oppression” and has sought to be bought out of his shares in Web Summit. Cosgrave does not say in his affidavit what Web Summit was worth but it has been valued by prospective bidders at $200 million in the past.
Cosgrave says he was advised that the “lost opportunity” to Web Summit of what had occurred “could amount to $10 million or more”. He says he is seeking an order that Kelly accounts for any gains he may have made at the “expense” of Manders Terrace Ltd and that he indemnifies the company for its losses. He says the setting up of a fund by Kelly has caused “significant commercial and reputational damage” to Web Summit. Cosgrave finishes his affidavit by asking for his case to be added to the commercial list of the High Court.
David Kelly and Patrick Murphy have known for some months that Manders Terrace Ltd was planning to sue one or other or both of them. They have responded in legal letters to Clark Hill, the lawyers for Web Summit, setting out how Kelly rejected all of the allegations being made against him, his business partner, and his new business enterprise.
Kelly’s position is Amaranthine was – and is – a separate legal entity to Web Summit and that Cosgrave was one of three partners in it. His position is he and Murphy behaved at all times properly and that the timeline of events supports this claim. He maintains he has been effectively a non-executive director for years and that he stopped being a non-executive director on March 22, 2021, earlier than April 20 as suggested by Cosgrave.
Kelly’s position is that he was entitled to set up a new fund and that he was entitled to market it to any party, including investors in Amaranthine I. He has chosen not to use the name Semble for his new fund but maintains Web Summit does not own the rights to this name, so he would be entitled to use it if he wanted to.
Kelly denies that he set up the new fund in secret and claims that he discussed it with Web Summit in December 2020, and that a decision was taken not to invest in it. He is also understood to have questioned the behaviour of Cosgrave. The Currency asked Kelly and Murphy for a comment in relation to their dispute with Manders Terrace Ltd and its majority shareholder Paddy Cosgrove.
A spokesperson for David Kelly and Patrick Murphy said: “This narrative is based on numerous factual inaccuracies and deliberate misstatements.
“Cosgrave and Web Summit were one of many contributors to Amaranthine, which was founded and run since inception by David and Patrick as a standalone legal entity with third- party capital.
“In March 2021, Cosgrave stated he no longer wanted to collaborate on Amaranthine’s Fund I, nor on any future funds with Patrick and David. As a result, they negotiated and entered into a separation agreement on terms favourable to Cosgrave.
“Throughout that process, Cosgrave acted in a completely untoward manner to David, his co-founder of over 10 years, which resulted in David resigning from Web Summit.
“Since the separation, Cosgrave has been intent on disrupting the lives and businesses of David and Patrick. Today’s filing is a culmination of this.
This is a meritless case, which follows a clear pattern of behaviour by Cosgrave. Patrick and David will strongly defend their position.”
The Currency put this comment to Manders Terrace and asked for a response. “In the interest of protecting all Web Summit Stakeholders, the Company has been compelled to issue proceedings against Murphy, Kelly and the Management Company for various claims,” it said. “Paddy acknowledged on May 7 (in a tweet) that David Kelly and Patrick Murphy would be stepping away after Fund I.”
This tweet sent by Cosgrave read: “A big thanks to David Kelly & Patrick Murphy for their work on @WebSummit’s fund Amaranthine. DK & PM will be stepping away from Amaranthine after fund 1 to pursue other interests. We wish them well. @WebSummit’s Amaranthine is looking forward to backing more great companies.”
“Patrick Murphy and David Kelly assured Web Summit there was a roadmap in place to deploy remaining capital of Fund I so no longer needed Web Summit staff resources (no more weekly meetings with startups team leads etc),” a spokesperson added. “Paddy was still going to be actively involved in his capacity as a member of the General Partnership including General Partner, Limited Partner and startup relations until they kicked him out of the fund.”
In response to Manders Terrace’s response, a spokesperson for Kelly and Murphy said: “Cosgrave says many things on his personal Twitter account. David and Patrick have not stepped away from anything. We continue to run Amaranthine I. As part of a negotiated separation, we granted Paddy a right to use the Amaranthine name for a future, unrelated fund in good faith.”
When Paddy Cosgrave left the Manders Terrace house a good few years ago, he got his friends to sign the famous couch where the plans to really grow one of the world’s biggest events was dreamed up. The couch was later taken to one of the last Web Summit’s in Dublin for attendees to sit on. It is now in Web Summit’s headquarters in Dartry where the business has continued to employ hundreds of people despite Covid-19 and the emerging battle between two of its founders in Ireland and the United States.
What Web Summit created and has become since those early years on the couch is extraordinary. It has sparked many deals, inspired great startups, and helped billions be raised by investors. For the 40,000 people from around the world attending the summit in Lisbon in five weeks’ time, finding the next deal is what they will be thinking about.
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I’m like a broken record on this thread.
As ever with Paddy it starts and ends with his ego.
@Julio_Geordio has nailed it here I’d say - Paddy’s throwing a strop because the lads have decided they don’t want to work with him anymore
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I’ll pull that down in a bit, it’s a pain to C&P from there. Pay up you scabs.
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Yeah, I’m reading it on my phone here.
Bullying, a rake of employment issues, using the company for political ends etc etc
It’s all exactly what you’d expect to be honest
The Glassdoor reviews aren’t too flattering either. I’m sure Leo write them all.
Didn’t realise he was behind this site
Wasn’t this disproven?
He’s not - Web Summit is 
It’s such a cheapskate move too because if he really believed in all these political things he could comfortably fund it himself personally. And then he talks about corporate influence with a straight face 
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