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But why can't you create a business that is an accredited investor, which invests in companies based on its LP's choices? In other words: Let's say I want to i
by david927 17y ago
But why can't you create a business that is an accredited investor, which invests in companies based on its LP's choices?
In other words: Let's say I want to invest $100 in SmallCompany.com, for the equivalent 100 shares. I make that bid, and if SmallCompany accepts the bid, then I give Me-VC.com (the accredited VC company) $100 and Me-VC would make an equivalent investment in SmallCompany of that amount, for that number of shares. If SmallCompany exits, I get a return commensurate with the number of shares Me-VC invested for me.
Edit: I developed a site to back this but I've been searching for someone to co-found on the business/legal side, which in this case, is by far the tougher role.
- HockeyPlayer 17y agoIn your example, you would need to be an accredited investor to invest in Me-VC.
- david927 17y agoIn the U.S. But then this will happen outside of the US. It makes me mad that in a country that has nearly zero financial regulations from fleecing the poor, there are regulations from keeping the poor from investing in seed stage ventures. The rich can invest in Twitter and the poor are stuck with the lottery (i.e. mathematically constrained odds of 'impossible'). Fuck the rich.
- yalurker 17y agoFor what it's worth, there are many mutual fund -> hedge fund relationships similar to what you have described. Average investors can't invest directly in a hedge fund, but they can buy into a mutual fund which has major holdings in one (or several). It's not the one-to-one relationship you described though.