Michael Arrington launching venture fund

America's most powerful tech blogger is taking a major step into the world of venture capital.

Michael Arrington, founder and co-editor of TechCrunch, is raising a venture capital fund to invest in early-stage technology companies, Fortune has learned. His partner will be Patrick Gallagher of VantagePoint Venture Partners, while investors will include many of Silicon Valley's top venture capital firms and tech luminaries.

One source says that the plan is to raise around $20 million. The cornerstone limited partner will be AOL (AOL), which acquired TechCrunch last fall and where Arrington is now an employee. Others will include VC firms like Kleiner Perkins, Greylock and Sequoia Capital.

Neither Arrington nor AOL responded to requests for comment. Gallagher said "no comment" when reached via phone.

It should be interesting to watch market reaction to news of this fund, since Arrington's prior investment activities have been something of a lightning rod.

Arrington, a onetime Silicon Valley attorney, was an occasional angel investor before founding TechCrunch in 2005. He subsequently did a few more deals, but in 2009 stopped investing after being accused one to0 many times of having a conflict of interest. After all, how were TechCrunch readers to judge the coverage that Arrington's portfolio companies did, or didn't, receive?

Then, earlier this year, Arrington announced that he was back in the investing game -- backing new start-ups from Napster founder Shawn Fanning and Digg creator Kevin Rose. He also said that he had become a limited partner in VC funds managed by Benchmark Capital and SoftTechVC.

Such moves reportedly violated AOL's code of employee conduct, but Arrington received an exemption. In a subsequent interview with Business Insider, he side-stepped a question about whether venture capital investing was his next career move -- instead reiterating how he had no plans to leave AOL (without mentioning that AOL might be backing his very own VC fund -- although it's unclear if this fund was yet in the works). It will be interesting to see how, if at all, his role will change with AOL and TechCrunch going forward.

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• Also at Fortune: CrunchFund confusion