When it comes to technology, people always look to the future. They want to know what’s next, and often, they turn to CEOs of tech companies, up-and-coming startups, and others at the forefront of progress for that information. And the Web Summit conference is where many of those people gather.
The annual technology conference has been held in Lisbon, Portugal since 2016, before which it took place in Ireland. Web Summit also hosts events all over, and since its founding in 2009, it has risen to become one of, if not the most, important tech events in the world.
However, while Web Summit is considered a resounding success and a must-attend tech event, things have been tumultuous between two co-founders behind the scenes.
The issue is between Patrick Cosgrave and David Kelly, friends from school and co-founders of the company. Cosgrave claims that Kelly secretly made a multimillion-dollar fund under false pretenses, using the reputation and resources of the business for personal gain.
It all started in 2018, when Cosgrave, Kelly, and one Patrick Murphy all came together to create the “Amaranthine Fund I.” The fund was meant to utilize resources, knowledge, and connections associated with the Web Summit conferences. Web Summit even invested $2 million into the first close of the fund, which reached more than $25 million. Meanwhile, Murphy invested $250,000 and Kelly invested nothing.
The results were great, with Web Summit receiving a return of $6 million. However, shortly after, talks about the next fund came to a halt with serious disagreements about critical business matters.
Shortly after, Kelly announced that he was leaving his position at Amaranthine and Web Summit. But this is when Manders Terrace, Web Summit’s holding company, alleges Kelly and Murphy were setting up the “covert” fund. The only difference was that they were doing so without Cosgrave.
The second fund even used the name “Semble Fund II,” with “Semble” being a brand and mark used by Web Summit. Manders Terrace claims that it was used in a misleading way to present the new fund as a successor to Amaranthine. There are even claims that previous investors in the Amaranthine fund invested in the Semble fund based on the misinformation.
Because of that, Cosgrave has said that it not only interfered with Web Summit’s fundraising efforts but lost them $10 million or more.
But Kelly tells a different story, claiming that control of Amaranthine belonged to him and Murphy and that it was a separate entity from Web Summit. Moreover, he alleges that Web Summit has no ownership or trademarks of Semble.
Kelly also claims that when discussions on the follow-up fund to Amaranthine fell through, Cosgrave told Kelly he had “kompromat” on him. Kompromat means damaging information in Russian, and the accusation was followed with a message about compromising photos, information that proved Kelly had been unfaithful to his wife, and further harassment.
In addition to the kompromat allegations, Kelly’s lawyers also alleged Cosgrave often made decisions unilaterally, ignoring shareholders. These actions include shutting down a lucrative acquisition deal after nine months of negotiation. In response, Kelly is suing Cosgrave and the company for oppression of shareholders’ rights.
Allegations of bullying behavior by Cosgrave have also come forward, including verbal and digital harassment. And this is not Cosgrave’s first time in trouble. Numerous social media mishaps have occurred, including one that saw him in court, and he has faced scrutiny in the past about Web Summit.
But even with plenty of struggle behind the scenes and more legal action popping up, Cosgrave seems ready for this year’s Web Summit, which boasts over 900 speakers and 70,000 attendees from all across the world.
Spencer Hulse is a news desk editor at Grit Daily News. He covers startups, affiliate, viral, and marketing news.