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Nor should any normal retail investor purchase crowd-funded equity for retirement purposes. These are risky bets on immature companies with unproven products &
by roymurdock 11y ago
Nor should any normal retail investor purchase crowd-funded equity for retirement purposes. These are risky bets on immature companies with unproven products & business models and unvetted financials. I'm fairly certain that the majority of retail investors who are looking to put their money into crowd-funded equity will understand the higher risk associated with this new asset class.
- tptacek 11y agoI can't see any reason to accept the premise that equity crowdfunding investors are sophisticated. The entire point of deregulating equity --- which is what equity crowdfunding is --- is to allow unsophisticated investors to invest.
- roymurdock 11y agoAn unsophisticated investor can deduce that the risk profile of Coke is much different than that of a company with a penny stock trading at $0.05. Likewise, the majority of "unsophisticated" investors can probably deduce the difference in risk between investing in <bluechip> and <startup>. But we can't know for certain without conducting some kind of survey of the demographics and level of sophistication of the retail investor population. As someone else pointed out - the SEC should be protecting investors/general public from unethical and illegal acts by the businesses, not from themselves and their own lack of knowledge. If you don't know what you're doing, you probably shouldn't be investing in the first place. Put your money in an ETF/savings account and only gamble what you're willing to lose in the equity crowdfunding market.
- tptacek 11y agoYou can already do this. What startups want to do is market investments without dealing with public company disclosures, or the stigma of being an OTC public company.