Former BusinessWeek reporter, TechCrunch columnist, and current tech PR star Sarah Lacy has made a name for herself: her website, PandoDaily, is one of the industry's most loyal allies. But if you do something she doesn't like, she and her goons will try to destroy you. Look at their rabid emails and see.

Lacy organizes a regular series of speaker panels, wherein investors, startup founders, and their hangers-on congregate to ask and answer softball questions. Last year, PandoDaily held a "fireside chat" with billionaire electric car mogul and sci-fi author Elon Musk. The confab took place at Cross Campus, a co-working and event space in Los Angeles. You can see the interview here—it went fine!

But what you can't see is the fact that Cross Campus had placed a banner with its name above the stage, which sent Lacy, and her editorial associate Paul Carr, into a frenzy. They're a toxic pair, and in their tightly insulated sphere, they carry enough influence and favor with investors and other startup owners to make threats. Or at least they think they do.

A Cross Campus co-founder tried to apologize:

On Mon, Jul 16, 2012 at 2:33 AM, Dan Dato <dan@crosscamp.us (mailto:dan@crosscamp.us)> wrote:

Sarah, I want to express how upset I am that you were not satisfied with the event at Cross Campus. I've spent my entire career building companies (including a publishing company) and long-term relationships, and I pride myself on being able to achieve success for all my clients/customers/partners through exceptional service. I take it personally to hear how disappointed you are regarding the execution of the event.

[...]

Not good enough for Lacy. In plain terms, she says she will smear Cross Campus over this:

On Mon, Jul 16, 2012 at 9:28 AM, Sarah Lacy <sarah@pandodaily.com (mailto:sarah@pandodaily.com)> wrote:

Dan- Those are all very nice sentiments, but unfortunately do not address the issue at all. The way you have worded this as if I'm being unreasonable. I did not expect perfection. I didn't ask you to spend all week inviting VCs etc. We had no problem selling out the room. We never do. What we asked is to be treated with respect. When my team says we cannot have a sign hanging or we need exclusive access to the greenroom so people aren't hounding our guest and those requests are not respected that is not basic respect. You are listing stuff that was icing that we didn't ask for. I am talking about the cake— the very basics of any agreement. You could have done nothing above the agreement and if you'd simply treated Oni with respect and honored those two simple requests, we would have been thrilled with the experience and been on the road to a great partnership. It's quite simple and it frankly didn't need to take a week of work on your end.

I am spelling this out because your note below doesn't seem to grasp it. At all. *Do* you understand the issue? I am still not sure. This "oh let's hug it out" without taking any responsibility is exactly the problem. (Those were Ronen's patronizing words on site to Oni.) We are not silly irrational little girls. We are running a serious business with investments from the biggest VCs in the Valley. And we don't like people taking advantage of us. At some point that will become apparent to you. (Ronen calling Oni "darling" at the event after busted sneaking people in didn't sit well with me either)

Now, as what to do next. Normally we charge $30k for that level of sponsorship. Since you guys were (seemingly) such good partners, had you asked me what it would cost you, I probably would have discounted it to $20k or so. (We can provide comps on these in case you mistakingly think I'm making these numbers up.) Now I could invoice you for the $20k in brand sponsorship, but I doubt you'd pay it. And unfortunately the issue was not called to my attention on site, so I can't make you. I can't know *for sure* that you guys were aware of exactly what you were taking without paying, although it's quite clear you did know we didn't want the sign there.

That gives us two realistic ways to move forward:

1. we sever the relationship entirely and never do another event there. rest assured we will let people know why when they ask and we'll reference it in our next post about our next LA event. we are always upfront about issues with venues because a lot of people book venues because we've done an event there and I don't want people using my name to bring in events when we have been screwed over. we are already recutting the video to take out your branding as much as possible— even though 90% of the damage is done as most of the audience has seen it.

2. you work off the $20k you stole from us. That would mean we pay no venue fees at all for the next eight LA events. If you go this route, rest assured there will be no crosscampus branding unless you pay for it, like any sponsor. we are happy to show you what we provide gratis for Madrone, our venue in SF. We will have to have very clear rules since trust has been broken. For every person you sneak in the back room, we'll charge you $100. For every unauthorized sign, we will charge you $5000. etc. you will treat my team with respect.

Honestly, it's up to you guys. If you feel you've done nothing wrong, pick option A. We have plenty of venues that were disappointed they weren't picked and would be happy to be given another shot. I am happy moving forward with either, but these are the only two scenarios that work for me. This is not a negotiation. Please let me know, so we can start working on our next LA event ASAP.

Sarah


Emphasis added. Essentially, Lacy demands that a company, which had the audacity to put its logo on its own property, let her use their space for free in order to "work off" a figure she believes was "stolen." It's a shakedown, pure ego retribution. This is in no uncertain terms a threat: either you'll work for us for free, or we'll disparage your company in a way that will hurt you.

Cross Campus co-founder and CEO Ronen Olshansky replies in his company's defense:

Sarah,

From this point on, address all communication to me and not to Dan. He has been, in my opinion, too accommodating. I am beyond offended by your demeanor and surprised by your distortion of reality. Although treating people with disrespect and creating an environment of terror for your colleagues may be the norm in Hollywood and in the world of online journalism, it's not how we do things at Cross Campus.

Now, here are my options for how to proceed:

1. We will do another event with you at the same SPONSORED rate. This is far below the market rate. If you think there is any other venue in Santa Monica that will give you as much leeway as we did, coupled with such a low price, and a capacity for 400 people, you are mistaken. Do some market research. Find out how much the Fairmont and Shutters charge for their rooms. Ask them if you can serve beer and pizza and see what they say.

2. We will both walk away and not disparage one another. I will not be extorted by anyone, irrespective of their following in the blogosphere. The words in your email ring very close to extortion.

[...]


He certainly has a point! The ol' Give us money or there will be consequences maneuver—tried and true. But that doesn't stop lapdog PandoDaily columnist Paul Carr from entering the fray with all the fury of a spurned sorority girl:

From: Paul Carr <paul@paulcarr.com> Date: July 16, 2012 12:41:29 PM PDT To: ronen@crosscamp.us Cc: dan@crosscamp.us, Nathan Pensky <nathan@pandodaily.com>, Kym McNicholas <kym@pandodaily.com>, Sarah Lacy <sarah@sarahlacy.com>, Michael Carney <michael@pandodaily.com>

Subject: Re: Thursday, July 12th

Ronen, I'm just going to jump in here, as someone who is not employed by PandoDaily, can't speak for PandoDaily but who has been BCC'd on the conversation so far. Also, I was a witness to much of what went on that evening and can absolutely verify Sarah's telling of it. As such, here's my measured response...

Fuck you Ronen, you condescending sack of shit. I was at the venue that night and I saw the way you and your team tried to give Oni and Pando the runaround, knowing that they were utterly swamped with the last minute details of the event and so weren't able to push back. The banner was never agreed in advance, yet you went ahead and put it up anyway, trading on the fact that noone would have time to do anything about it. Rest assured, had I been aware of what was happening, I would have cut the thing down with nail scissors and set fire to it in the parking lot. From the Tesla bullshit to the attempts to sneak people in the back door, you guys have been a clown-show from the start.

Sarah's proposal — that she walk away from the venue but make it clear why, is entirely standard practice for PandoDaily. As a writer, Sarah has always been very up front with readers as to why she makes the decisions she makes — good and bad. In fact, she and I do a video show on that topic every week. You should watch a couple of episodes, not least you'll be starring in an upcoming one. We took the same approach at TechCrunch — openness and transparency from the start. Don't you dare suggest this is "extortion" or anything even slightly related to it — had you guys not fucked up, Sarah would be singing your praises on PandoDaily right now, like she regularly does with our other partners. What she was asking for is you to make right the theft of services you committed in the full glare of the cameras.

Now, obviously I can't respond to your laughable counteroffers. That's for someone at PandoDaily to do. What I can do is take you up on your equally hilarious offer of litigation by your — quote — "mainly Persian Jew" backers. What their ethnicity has to do with anything, I'm unclear — was it supposed to be a veiled ex judica threat? I've read it several times and, given you mentioned your litigators separately, that's the only conclusion I've been able to draw regarding the "great lengths" you'll take to protect your business. What is absolutely certain is that, having fucked a group of my friends around, you're now threatening a lawsuit — or worse — if they tell anyone how you behaved.

I don't like it when my friends are threatened. Actually it's my least favorite thing in the world. So let me be absolutely clear, as someone with no legal or financial ties to PandoDaily, that from today, I will not rest until every man, woman and child knows the unvarnished truth about how fucking appalling CrossCampus is to work with.

By this I mean that if, on any given day, the tiniest company in the entrepreneurship community so much as makes a sideways glance as they walk past your venue and does not immediately recall my views on the place, I will know my work is incomplete. There's no extortion here — no "unless, or but" — I don't want *anything* from you. In fact, PandoDaily is the first company that I'll be urging to walk away from you clowns. Whether they take my advice is down to them. But please know, if they don't, at the next event I'll spend my introduction ripping you a new one from the stage.

As for your threats of retribution against anyone who tells the truth about you. Bring them the fuck on, but against me, not PandoDaily. Bring your lawyers and your apparently ethnically relevant backers. Bring them with lawsuits and writs and injunctions and whatever dark threats of baseball bats and dark alleys really lay behind your email. But first, do me a favor: Google me. Read a few of my columns in the Guardian, the Times, the Wall Street Journal or on blogs like TechCrunch and — of course — PandoDaily. Or pick up one of my books. Read what *always* happens when someone starts a public fight with me, or attempts to shake down one of my friends. I don't use lawyers or pathetic fratboy threats. I simply tell the truth, again and again and again and again until when people hear the words "CrossCampus" their face becomes contorted into an involuntary grimace, and maybe they throw up a little in their mouths.

Instead, here's what I suggest you do next Ronen. I suggest — and it's not really a suggestion — you fuck off and stop trying to play with the big leagues. You're barely ready for pre-school, let alone a pathetic "our lawyers are bigger than your lawyers" dance. Hopefully Sarah will heed my advice and never lighten your doorstep again. Hopefully she's still going to tell people how you treated — and threatened — her and her team. But, again, that's her call. What she does next has no impact on what I do as a fan of PandoDaily. I don't want your money, or your services, or your goods. I just want the world to know what happens if they decide to host an event at CrossCampus: incompetence, fraud and menacing threats about what will happen if they dare to speak out.

From here on out, Ronen, it's me and the First Amendment vs you and your "mainly Persian Jews" and "litigator on board". Batter up.

Paul

(Emphasis added, once again, and Carr is referring to Olshansky's tongue-in-cheek note that his company's backers are Persian Jews)

There's a reason it makes sense to entertain the adults of the startup world with a child's circus diversion. Tantrums are always an option.

PandoDaily plays the flattery game well enough—but only within the diamond-turning pressure-bubble of Silicon Valley delusion can these people mistake sycophancy for real power. You run press releases and puff pieces, and then cash that in for fantastical feints.

If anything, it's rather the opposite: I got these emails from someone who was considering business with Pando and then sprinted the other way.

Photo: Charles Eshelman/Getty

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