Stock and Bond Markets Dethroned: Private Fundraising Is Now Dominant

Post by kaycebasques » Mon, Apr 02, 2018, 9:27 PM UTC

conanbatt wrote: post #24

maerF0x0 wrote: post #18

I've long thought about a law whereby companies over some 409a valuation must allow public trading of their stock. For example maybe all companies over $5B or some other quite large valuation would be required to allow public sale of stock. This would be good for much of society. It gives liquidity to employees, it creates a market forces valuation, it allows pensions and other institutions to more accurately index t…

Going public is super expensive. Are you saying the state should pay companies to go public?

Post by jogjayr » Mon, Apr 02, 2018, 9:48 PM UTC

jjoonathan wrote: post #35

ehmish wrote: post #29

Earlier quoted context omitted.

You're required by to set up systems to ensure accounting information can not be tampered with, even if people tampering with accounting information isn't considered to be a high risk. To make it more concrete, it means you can't push to master any more in a git repository to fix some botched merge because, it happens to deal with revenue in some tiny corner of it's functionality and every change has to be approved b…

In light of git's enforced immutability constraints and the fact that multiple approval for merges is SOP at many large companies, I suspect that isn't a very good analogy.

Post by conanbatt » Mon, Apr 02, 2018, 9:59 PM UTC

kspaans wrote: post #40

pcwalton wrote: post #33

Earlier quoted context omitted.

State lotteries are unethical for many of the same reasons why accredited investor requirements exist.

It's a lot easier to fix though: make minimum ticket prices higher. At $20 or $100 each, there is more sticker-shock friction to prevent overspending on lottery tickets.

Post by saalweachter » Mon, Apr 02, 2018, 10:44 PM UTC

mattnewport wrote: post #52

JumpCrisscross wrote: post #12

Earlier quoted context omitted.

I used to be skeptical of accredited investor requirements [1] until cryptocurrencies happened. That an entire space can (a) go from zero to fraud in the blink of an eye and (b) not only ignore the delineation between gambles and core investments, but develop a collective disdain for it and anyone espousing it, has me convinced of the rule's wisdom. Investing in start-ups costs money. Diligence costs money, negotiati…

Another interpretation is that the crypto mania is evidence of huge unmet demand for the types of investment profile that are largely unavailable to non accredited investors. If regular investors had access to more (possibly less risky) such investments perhaps the demand for crypto investments wouldn't have been so great.

Post by Anon1096 » Mon, Apr 02, 2018, 11:21 PM UTC

FeepingCreature wrote: post #34

RussianCow wrote: post #23

Earlier quoted context omitted.

> What are some downsides I'm missing? Maybe forcing owners to give up equity in their business just because their valuation hit some magic number? Keep in mind that not all $5B companies are Silicon Valley, VC-funded startups, and some founders still retain the majority (or in rare cases 100%) of their equity. I also think you're over-exaggerating the benefits. None of those things seem like problems that need fixin…

This wouldn't per se force owners to give up equity, it'd merely prevent them from making it available to a limited circle of investors.