4 ms·

Feel a bit of hay fever coming on. Depends on what you mean by "Do I have the right to clean out your parents bank account and get them to get a second mortgag

Feel a bit of hay fever coming on. Depends on what you mean by "Do I have the right to clean out your parents bank account and get them to get a second mortgage on their house..." If they decide to invest in something and have to do those things to get cash and it goes bad, oops on them. If you commit fraud and get access to their financials and clean them out, oops on you. We give a lot of leeway for people to solicit support of new inventions and ideas. There also happens to be a lot of pyramid schemes and similar get rich quick scams. I don't have a fool proof way for seeing a scam from a score. If a kickstarter has specific data, date targets, shows they've done some work and made connections, I am more inclined to have a go. If someone is saying "Get your friends to sell tupperware, you'll be rich in no time!" with little detail otherwise, I'll laugh and say no thanks.

tptacek 10y ago
We actually have not, for the last 80 years or so, given a lot of leeway for people to solicit support of new inventions and ideas. We've allowed people to: a) Sell (or pre-sell) inventions --- but those sales logically offer only the capped upside of the product itself, and nobody will leverage themselves to get access to that upside. b) Join as a part-time employee an affiliate sales program for an invention --- this sometimes does involve leverage (and when it does, that's when you see companies settling like Herbalife did), but there's also a time commitment that mitigates the risk. c) Solicit investment from accredited investors who, by dint of substantial resources, are presumed to be sophisticated enough either to evaluate the investment or to not be subjecting themselves to existential financial risk by participating. d) Solicit investment from the public after completing onerous compliance and disclosure programs. What's being discussed today is something in between (c) and (d), where investments can be marketed directly to the public, to people we cannot presume to be sophisticated or financially secure, with virtually none of the disclosure and compliance requirements of a public company. It's reasonable to be skeptical of this.

tptacek 10y ago

We actually have not, for the last 80 years or so, given a lot of leeway for people to solicit support of new inventions and ideas. We've allowed people to: a) Sell (or pre-sell) inventions --- but those sales logically offer only the capped upside of the product itself, and nobody will leverage themselves to get access to that upside. b) Join as a part-time employee an affiliate sales program for an invention --- this sometimes does involve leverage (and when it does, that's when you see companies settling like Herbalife did), but there's also a time commitment that mitigates the risk. c) Solicit investment from accredited investors who, by dint of substantial resources, are presumed to be sophisticated enough either to evaluate the investment or to not be subjecting themselves to existential financial risk by participating. d) Solicit investment from the public after completing onerous compliance and disclosure programs. What's being discussed today is something in between (c) and (d), where investments can be marketed directly to the public, to people we cannot presume to be sophisticated or financially secure, with virtually none of the disclosure and compliance requirements of a public company. It's reasonable to be skeptical of this.