The Company That Won TechCrunch's Startup Contest Was The Only Company That Got Funding From Judge Mike Arrington

TechCrunch founder Michael Arrington was forced out of TechCrunch when he starting a fund to invest in startups. It was deemed a conflict of interest, so he was ousted.

His time away from the tech news site didn't last long. After announcing that he would leave in September of 2011, in May of 2012, he was coming back to host Disrupt, TechCrunch's annual startup contest.

Apparently TechCrunch wasn't all that worried about the conflict of interest thing. It thinks its readers are smart enough to figure out when Arrington has a conflict, and when he doesn't. It thinks readers can figure out what's what.

Well, for TechCrunch and Arrington's sake, we hope that's right, because it has another conflict controversy on its hands.

Yesterday, a startup called Layer won TechCrunch's 2013 San Francisco Disrupt contest, beating out five other contestants.

Arrington's fund, CrunchFund, is an investor in Layer, notes Sam Biddle at ValleyWag. Arrington was a judge at Disrupt, determining which company would win. He's not an investor in any of the companies Layer was competing against, as far as we can tell.

For winning Disrupt, Layer gets $50,000, and some more tech press.

Sure seems like a conflict!

But if the other startups are okay with it, and readers are okay with it, and attendees don't care, then what are you going to do?

That said, in the future, TechCrunch should probably avoid having people who have already made investments (and thus, already voted on their favorite startup) judging the competition.

Arrington wasn't the only judge. Other panelists, per TechCrunch: Roelof Botha of Sequoia Capital, Chris Dixon of Andreessen Horowitz, David Lee of SV Angel, Marissa Mayer of Yahoo, and Keith Rabois of Khosla Ventures