We’ve seen this story unfolding for quite a few weeks, and some could even argue that the ball started rolling in September of 2010 when Aol acquired TechCrunch. Long-time technology blogger Michael Arrington is resigning as the Editor of TechCrunch in order to pursue a full-time career in venture capital.

The reported $20 million fund, according to The Wall Street Journal, is backed by Aol itself as well as “several venture-capital firms.” Arrington gave a forewarning back in April of this year, stating that “in a few months, there’s a very good chance that I’ll be a direct or indirect investor in a lot of the new startups in Silicon Valley.”

The move comes after a long history concerning investments with Arrington. In 2009 Arrington had stopped investing in startups after accusations of conflicts of interest reached a place where they “became somewhat distracting”. He had since resumed investing in startups, noting that TechCrunch always disclosed when he had invested in one of the startups about which the publication had written.

It was initially reported today that Arrington would be stepping down as the Editor of TechCrunch, but would remain involved as the “Founding Editor”. As the day has progressed, that story has changed to be a bit more finite, where Arrington’s boss Arianna Huffington is reported to have stated that Arrington will be “welcome to write for TechCrunch as an unpaid blogger, but have no editorial role.”

Editorial duties for the site will now fall into the hands of Erick Schonfeld in the interim, states The Journal, while the search for a new Editor moves forward.

We first caught wind of the rumored “CrunchFund” back in July of this year, then a tweet from former Arrington partner Jason Calacanis seemed to confirm the rumors. At the time we brought about the thought that it did make sense for Arrington to move in this direction (and many on Hacker News have the same feeling, especially concerning Arrington’s PR and press credentials). However, the very thought raised the question of conflicts of interest.

Aol has a long-standing rule of not allowing its writers to invest in companies about which they write. However, that rule appears to have been changed when it comes to Arrington and TechCrunch. According to Aol’s Tim Armstrong, as quoted in The New York Times:

“TechCrunch is a different property and they have different standards. We have a traditional understanding of journalism with the exception of TechCrunch, which is different but is transparent about it.”

Aol/HuffPo is not without its own share of conflict history, as well. Huffington herself used the stage back in May of this year to engage in what some would call market manipulation, stating publicly to Arrington that “I think if you buy some AOL stock right now, you’re going to make a lot of money.”

As direct competitors to TechCrunch, this is a bittersweet piece of news for us here at The Next Web. We have a strong working relationship with TechCrunch and Arrington himself, so we extend our best wishes to him on a professional level. With that same due respect, we’ll also hate to see fewer bylines with his name on them.

It’s nearly a natural progression, to move from a point of being an observer of startups to wanting to take a more active roll in the creation and growth of them. On that level, nobody should begrudge Arrington for taking steps to do just that and resigning from the position of Editor for the publication is an above-board move that should absolutely have been done.

In the interest of full disclosure, The Next Web as a publication is owned by a team of 4 entrepreneurs. The Next Web also has an incubator of its own, and from time to time we have written about the companies within that incubator, always with full disclosure of the relationship directly in the body of the stories themselves.