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Stock and Bond Markets Dethroned: Private Fundraising Is Now Dominant

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Re: Stock and Bond Markets Dethroned: Private Fundraising Is Now Dominant

#71

Post by SkyMarshal »

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.

It could also be argued that the success of crowdfunding sites like Kickstarter are similar evidence that people want to make micro-investments in early stage ventures that appeal to them.

Re: Stock and Bond Markets Dethroned: Private Fundraising Is Now Dominant

#72

Post by gibybo »

dmoy wrote: post #68

Say one has enough income or assets to be an accredited investor, but doesn't want to spend the time to figure out what private market investments are worthwhile. Do there exist any low fee broad market index funds for that?

EquityZen has an index fund of sorts, but the fees are high and it only includes companies that are on EquityZen which are probably not representative of the average.

I'm not sure how much you need to join a round with a VC fund (and they would distribute that into a bunch of companies for you), but that might be your second best bet.

Re: Stock and Bond Markets Dethroned: Private Fundraising Is Now Dominant

#73

Post by rdlecler1 »

Public markets are highly efficient and it’s difficult to have a real sustainable advantage. Private markets are different. Access to deal flow is king and there is no insider trading because not everyone has the right to invest in any company they want. This concentrates returns in a handful of king makers.

Re: Stock and Bond Markets Dethroned: Private Fundraising Is Now Dominant

#74

Post by rdlecler1 »

One issue is even with accredited investors is the so-called 99 investor problem for pooled investment vehicles. If I’m a company I don’t want thousands of individual shareholders on my captable. The answer would be that we could have crowdfunded VC funds that invests. But because the SEC limits pooled investment vehicles to 99 accredited investors you limit the number of $1k-$100k checks you can take in, which then limits how big a crowdfunded VC could be.

Re: Stock and Bond Markets Dethroned: Private Fundraising Is Now Dominant

#75

Post by wslh »

JumpCrisscross wrote: post #12
sol_remmy wrote: post #9

Thank goodness the government protects me, a non-accredited investor, from investing in any private companies! I'm too stupid to make investment decisions without going broke! https://passiveincomemd.com/not-secret-society-accredited-in...

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…

I assume you are in favor of closing Las Vegas and prohibiting all those marketing campaigns that play with the brains and sentiment of billions of people. Many different kind of scams or tricks are present everyday.

Also, there are zillions of entrepreneurs wasting their health and time following impossible dreams. I prefer losing money than my health.

I am not endorsing any ICO but education should change to include basic finances since elementary school.

Re: Stock and Bond Markets Dethroned: Private Fundraising Is Now Dominant

#77

Post by conanbatt »

s73v3r_ wrote: post #63
conanbatt wrote: post #56

Earlier quoted context omitted.

You are welcome to restrain yourself from your own ignorance, but I don't see why you should have the right to do so on others that don't enjoy that bondage. Punish those you disagree with by letting them hang by their own rope, or realize later on that it is you today who is being hang by your own.

So what happens when irresponsible investors plunge the country back into another great depression? How are you going to prevent the mistakes of others from causing a financial collapse which causes me to get laid off, through no fault of my own?

You overestimate the cost of speculative gambles, but let me ask a the opposite: if the regulation costs you your job and an economic recession who is going to compensate you for it? Because as far as i know the government has never given a check to compensate for its mistakes.

Re: Stock and Bond Markets Dethroned: Private Fundraising Is Now Dominant

#78

Post by conanbatt »

maerF0x0 wrote: post #28
conanbatt wrote: post #24

Earlier quoted context omitted.

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

yeah its hard to say... I would imagine most companies could create new stock to sale in order to cover the costs? I was mostly thinking about creating liquidity for those who want to sell existing stock, more than raising from sale of new stock .

In freedom, liquidity is plentiful. Every company is public if every employee is allowed to sell their stock in the open market. It is precisely regulation that creates private markets. Do without and you will cheaply have an infinite Amount of public companies, without the significant expenditures of dues to wall street.

Re: Stock and Bond Markets Dethroned: Private Fundraising Is Now Dominant

#79

Post by nostrademons »

lr4444lr wrote: post #66
JumpCrisscross wrote: post #47

Earlier quoted context omitted.

> So a company has to claim it loses money to be absolved of any moral burden? State and federal governments aren't private companies.

I think you're missing his point. Those very entities have agencies which are both "protecting" the public by imposing regulations that prevent them from expenditures with negative expected value, and at the same time peddle them. Imagine if there were a state-run cigarette producing public benefit corporations alongside public health departments. You'd have two agencies, one cultivating and the other discouraging th…

Also corn subsidies vs. obesity-related healthcare; free roads & parking vs. smog controls; loose monetary policy vs. financial bailouts; having everyone prepare their own tax returns (as opposed to the IRS just sending out a bill along with their calculations) vs. spending money prosecuting tax evaders; and CIA-financed terrorists using our own weapons against our military.

When you think about it, most of humanity's problems come from "fixes" put forth by some other branch of humanity. Humans are not particularly logical or inclined to see the big picture; they are very good at feeling a pain point acutely and slapping a band aid over it. Over time, this becomes rather absurd, but in the meantime the complexity lets societies that act like this grow bigger populations and amass bigger armies, and so that's all you see today.

Most historical peoples were quite happy to live as hunter gatherers, except that larger & more miserable societies had a knack for enslaving & eradicating them.

Re: Stock and Bond Markets Dethroned: Private Fundraising Is Now Dominant

#80

Post by KKKKkkkk1 »

csense wrote: post #4

It's a tough problem. In the late 1990's, there was a big wave of accounting scandals (Enron, Worldcom, etc.) Which led to heavy regulation (the Sarbanes-Oxley Act). The Act was a well-intentioned attempt to protect retail investors from crooks. The problem's that compliance is so burdensome and expensive that firms don't want to enter the public markets until they're already large (or if they're forced to when their…

I doubt that investing in early-stage unicorns is the best way for the poor to get out of poverty.
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