A Valleywag tipster whispers that a company that had made the initial cut of 20 companies for the Techcrunch40 conference — back when it was known as "TechCrunch20" — got bumped when conference organizers "doubled down" and expanded the list to 40 startups. The company's sin? Competing with a startup funded by one of TechCrunch40's four VC sponsors. The competitor got bumped, and room was made for a sponsor-backed startup. "Ah, the Valley mafia at its finest," the tipster concludes. Of course. Sand Hill Road was built on conflicts of interest.

If true, then the organizers — Internet entrepreneur Jason Calacanis and TechCrunch editor Michael Arrington — have figured out a very clever hack on the startup-conference business model. Instead of charging startups directly, charge venture capitalists to let their favored portfolio companies in. And throw in a handful of unfunded startups to make it all look above-board. Surely the sponsors — Sequoia Capital, which has backed Calacanis's Mahalo; Mayfield Fund; Charles River Ventures; and Clearstone Venture Partners — would heartily approve of this scheme. It's brilliant. Ingenious. My hat is off to you, Jason and Michael, if you have indeed pulled this off.

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