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There seems to be serious moral hazard for equity crowdsourcing. Realistically, potential investors don't have to ability to conduct adequate due diligence. The

There seems to be serious moral hazard for equity crowdsourcing. Realistically, potential investors don't have to ability to conduct adequate due diligence. The projects seeking funding are likely to be riskier/lower quality since high quality projects will probably pursue traditional VC/angel financing (less hassles, reporting requirements). In the end, you have uninformed investors betting on high risk projects where the entrepreneurs lack any real supervision from said investors.

dforrestwilson 10y ago
As opposed to all the shady penny stocks floating around out there? Here are two companies that have been playing ignorant stock market investors for years: https://www.google.com/finance?q=NASDAQ%3AORMP&ei=D6w5V5HNKoPFePfMq_AG https://www.google.com/finance?q=NASDAQ%3AORMP&ei=D6w5V5HNKo... https://www.google.com/finance?q=NASDAQ%3AANGI&ei=Faw5V-iPJ5bnerirr5gN https://www.google.com/finance?q=NASDAQ%3AANGI&ei=Faw5V-iPJ5... There are literally thousands of fake or terrible biotech and tech companies in the supposedly highly regulated public markets. Base yourself in Israel or China and list on the NASDAQ. Pay someone to publish a bullish article on your blog, wait for buyers, and then dilute. You can have a field day and nobody will bother you. My point is that investors cannot and should not be protected. Educated? Yes please.
- howlingfantods 10y ago
  You're definitely right that there are many shady penny stocks being traded OTC. But I fail to see how shady penny stocks justify an even more opaque and less regulated equity market. Regulation is certainly imperfect, but it's much preferable to anarchy.
- vosper 10y ago
  In what sense is Angie's List either a penny stock or a scam? How are investors being duped? I'm just curious because I've seen a few ads for Angie's List and they have a $500m market cap.
  - dforrestwilson 10y ago
    The new management team could be better than the old, but the former CEO set up some favorable leases between ANGI and an office building which he and some board members owned. There were a few other egregious things, but this was the worst. I guess I wouldn't call ANGI an outright scam, but it's certainly shady.
    - vosper 10y ago
      Ahh, thanks. So it sounds like it's probably not in the same class as the pump-and-dump "XYZ Corp is about to blow huge!" penny stock shams that are out there.

dforrestwilson 10y ago

As opposed to all the shady penny stocks floating around out there? Here are two companies that have been playing ignorant stock market investors for years: https://www.google.com/finance?q=NASDAQ%3AORMP&ei=D6w5V5HNKoPFePfMq_AG https://www.google.com/finance?q=NASDAQ%3AORMP&ei=D6w5V5HNKo... https://www.google.com/finance?q=NASDAQ%3AANGI&ei=Faw5V-iPJ5bnerirr5gN https://www.google.com/finance?q=NASDAQ%3AANGI&ei=Faw5V-iPJ5... There are literally thousands of fake or terrible biotech and tech companies in the supposedly highly regulated public markets. Base yourself in Israel or China and list on the NASDAQ. Pay someone to publish a bullish article on your blog, wait for buyers, and then dilute. You can have a field day and nobody will bother you. My point is that investors cannot and should not be protected. Educated? Yes please.

howlingfantods 10y ago
You're definitely right that there are many shady penny stocks being traded OTC. But I fail to see how shady penny stocks justify an even more opaque and less regulated equity market. Regulation is certainly imperfect, but it's much preferable to anarchy.
vosper 10y ago
In what sense is Angie's List either a penny stock or a scam? How are investors being duped? I'm just curious because I've seen a few ads for Angie's List and they have a $500m market cap.
- dforrestwilson 10y ago
  The new management team could be better than the old, but the former CEO set up some favorable leases between ANGI and an office building which he and some board members owned. There were a few other egregious things, but this was the worst. I guess I wouldn't call ANGI an outright scam, but it's certainly shady.
  - vosper 10y ago
    Ahh, thanks. So it sounds like it's probably not in the same class as the pump-and-dump "XYZ Corp is about to blow huge!" penny stock shams that are out there.