S.E.C. Gives Small Investors Access to Equity Crowdfunding • Hacker News Board

Re: S.E.C. Gives Small Investors Access to Equity Crowdfunding

#61

Post by jsprogrammer » Sat, Oct 31, 2015, 6:04 PM UTC

Dylan16807 wrote: post #58

jsprogrammer wrote: post #24

Earlier quoted context omitted.

It is an interesting point, but it does contradict your prior claim. One problem I see is that an investor may actually be dealing with a lottery-like game without knowing. That is, a particular investment may have actual, calculable odds (would depend on the business model) that are as worse as the lottery model, but are, however, unknown (or even unknowable) to an investor.

Even a truly visibly awful business has better odds than a lottery.

I can't imagine that any late investors into Madoff's business had even a chance at a positive outcome. Assuming the lottery ball machine isn't rigged, there is still a chance that your numbers could come up.

Re: S.E.C. Gives Small Investors Access to Equity Crowdfunding

#62

Post by jsprogrammer » Sat, Oct 31, 2015, 6:12 PM UTC

tptacek wrote: post #46

jsprogrammer wrote: post #21

Earlier quoted context omitted.

Exactly, the post reads as investor-class propaganda. At the moment, the only logical explanation I can think of for posting such a piece is that you wish to reduce competition for equity by limiting the number of participants in the market. If you can limit the supply of cash, those with the cash can make many demands on those without. tptacek advocates for a limited supply of cash, carefully metered out by the cash…

I don't invest in startups; I work for them, and plowing the proceeds of that work back into startups (or any other tech company) seems like bad diversification to me. So no, I don't have an ulterior motive.

>I don't invest in startups; I work for them

OK

>plowing the proceeds of that work back into startups

So, you receive only cash for your work? No equity?

> seems like bad diversification to me

Ok, so you are invested in startups or tech companies then (if not, what are you diversifying from)? [Note: we have now contradicted claim 1]

>So no, I don't have an ulterior motive.

Maybe. I'm still not convinced that you aren't an investor though.

>Retail investors should get exposure to [x] through carefully managed funds that own lots of [xs], not by trying to pick individual winners themselves.

Said every fund manager ever [who, note, try to pick individual (for some definition) winners].

Re: S.E.C. Gives Small Investors Access to Equity Crowdfunding

#63

Post by akg_67 » Sat, Oct 31, 2015, 10:55 PM UTC

zacharycohn wrote: post #54

akg_67 wrote: post #30

Earlier quoted context omitted.

Have you looked into Lending Club and Prosper Marketplace peer to peer lending platforms? The retail investors on these platforms are having good success in assessing and managing risk with consumer lending. There is no reason that the same will not happen with equity crowdfunding. Equity crowdfunding platforms will be responsible for due diligence and standardizing the equity offerings instead of the individually ne…

Off topic, but I've been really wanting to get into lending club. I spent about three weeks researching, then when I was ready to pull the trigger... I discovered it's not available in my state. -_- Any advice, other than complaining to my state representative?

You might want to reach out to your state security regulator. IANAL, you might be able to pool funds with friends and form a partnership in an acceptable state.

Re: S.E.C. Gives Small Investors Access to Equity Crowdfunding

#64

Post by jsprogrammer » Sun, Nov 01, 2015, 6:34 PM UTC

jsprogrammer wrote: post #16

david927 wrote: post #10

Earlier quoted context omitted.

Startups aren't like Kickstarter projects. Crucially: people put money into projects on Kickstarter, not teams. Professional startup investors do mostly the opposite. That's actually a great reason why this may work. Apple was Woz and Job's first company and they hadn't finished college, going into a non-existent sector. No current investor would look at them. I know several startups that are working on something tru…

>the lottery whose odds are calculated and defined to not be possible to win Sorry, but this just isn't true. It is possible to win with a single ticket and the return on that ticket could be $xxxx million : $1.

Hilarious that this receives any downvotes.