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The "worse" value judgement is debatable. LPs are high risk and have deep pockets, so I'm not worried about them. As far as retail investors go, I am a bit con
by api 11y ago
The "worse" value judgement is debatable. LPs are high risk and have deep pockets, so I'm not worried about them.
As far as retail investors go, I am a bit concerned there but on the other hand anyone can blow money on lotto tickets or casinos and with those you're statistically guaranteed to lose.
I would like to see some requirement that retail investors are presented with a big fat warning that reminds them that this is a high risk investment and that they could lose all their capital. Granted they should know that, but people are biased and often forget.
Of course lotto tickets don't come with such warnings, so hey maybe it's fair.
My biggest concern isn't so much with the investor side but with what effect this might have on the signal/noise ratio in the startup world. I fully expect to see a ton of scammy shallow "companies" trolling for funds, and it'll make it harder on those with more substance than flash.
- fra 11y agoWorse because unsophisticated investors ("family offices" and "moms and pops") will have unrealistic expectations. Those expectations will have to meet reality sooner or later, and when that happens: * Life savings will be wiped out * Liquidity will snap back for startups * Many otherwise healthy companies will die It will be the sub-prime equity crisis.
- api 11y agoThat's why I'm in favor of some level of standards on disclosure and some standard warning for these kinds of investments. Another possibility would be a waiting period. People are impulsive, so maybe you have to wait 72 hours from signaling serious intent to actually making an investment. That would help prevent casino-think. I don't think it's wrong to open more investments to more people, but I'm also a bit wary of it being a total free for all shitshow.