I'm happy to see this happening. I pitched this same idea to a few friends last year and have wondered for a while why entrepreneurs don't commonly exchange equ

I'm happy to see this happening. I pitched this same idea to a few friends last year and have wondered for a while why entrepreneurs don't commonly exchange equity simply to reduce the risk of entrepreneurship, and why there aren't funds like this. What would be a good way to catalyze more of this type of activity? Does anyone have insight into the legal requirements of trading equity for equity? If entrepreneur equity exchanges became common, I believe it would have hugely positive impact on entrepreneurs and might even end up offering a better way to finance ventures. Let's say you had a ton of autonomous entrepreneur-to-entrepreneur equity exchange funds (or a market, who knows). Basically, funds where entrepreneurs recruit other entrepreneurs to participate in trading equity. Probably some would develop reputations as being where all the best entrepreneurs go and they'd become exclusive, like the best VCs currently, and those would be hard to get into. But there'd be no real limit on how many companies could join even the best, only how many promising ventures there are. (At least that's my guess, because there probably wouldn't be the same kind of overhead for accepting a new member as VCs face when making a new investment). Once you have a group of quality entrepeneurs who each own a bit of the pooled equity, individual entrepreneurs could simply sell some of their shares in the fund to raise money for their own ventures. Rather than selling shares in my company, I'd be selling shares in a bunch of companies just like my company. An entrepreneur could probably find a much better deal (just like VCs currently do) because the risk would be so much lower. The fund could also sell shares directly to investors and disburse it to members, but that might get a bit tricky. It seems to me like the best kind of organization to run this kind of fund would be a non-profit trade organization or some such. Or it could even just be a co-op where all the entrepreneurs are members. Obviously these funds would be cheaper for LPs to invest in than going through VCs, and entrepreneurs would get better terms if they were able to access a new class of investor. It also seems like a good idea for VCs and angels to set these up, though, because it aligns the interests of the participating entrepreneurs with that of the VC. As a VC, I want you to go for the big wins. As a member of the pool, I want everyone else to go for the big win, and by reducing my risk, it makes me more comfortable going big. I kind of thought this was just another of my somewhat ridiculous ideas until seeing this article. I'm happy to see it validated, at least in some small way.