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Who's losing their life savings or ending up in financial ruin in this scenario? Also I've never even heard of a "predatory investor", I'm pretty sure you just

by exogen 9y ago

Who's losing their life savings or ending up in financial ruin in this scenario? Also I've never even heard of a "predatory investor", I'm pretty sure you just made that up.

conanbatt 9y ago
If you are an investor, accreditation rules eliminate 95+% of the population as competition for your investment. That means you will get higher returns and better negotiation terms. Even founders cant invest in their own bethren! Think about that. YC startup founders could get together, talk to each other, and NOT be able to invest in each other. Neither could employees that have access to internal financials. You could believe your company is doing great, but you cannot invest. You dont have the chance to compete for the resource with the investors that can. This also means less money goes into investment. Result: - Qualified investors get higher returns - Employees get lower wages because there is less capital invested - Founders get less money - Fewer startups are created In the name of protecting compulsive gamblers?
- exogen 9y ago
  Yes, that all sounds fine. Protect average people, not startups trying to get rich. Yes. Yes. Yes. Life does not revolve around startups. Yes. Also, the people applying for home loans weren't compulsive gamblers. The banks literally told them they were qualified.
  - conanbatt 9y ago
    You are protecting investors from competition. Harming startups, harming founders, employees and consumers.
    - exogen 9y ago
      That doesn't sound like a very big deal. Average people are suffering actual material harm at the hands of predatory companies and you're worried about startup founders?! "The poor startup founders, they have slightly less of a chance to make even more money!!!" – said no one, ever. This is the saddest argument for removing financial protections I've ever heard. Again, life does not revolve around startups.
      - conanbatt 9y ago
        You have more sympathy for investors than founders and employees? Put it up to a vote and the vast majority will do away with these restrictions. The people don't want it. Some people want it, and some people benefit from it. As its usual in economics, those groups are not the same. "Financial protections" => the government collects a tax to impose a restriction on you, to benefit the richest class.
- gamblor956 9y ago
  If you are an investor, accreditation rules eliminate 95+% of the population as competition for your investment. That means you will get higher returns and better negotiation terms. Actually, for non-startups (i.e., 99% of new businesses), loans from banks, family, and friends, are the primary form of investment. This method of investing does not require the investor to be accredited. Neither could employees that have access to internal financials. Investors are also not entitled to internal financials. They might have a right to financial statement, but those are very different things. Employees get lower wages because there is less capital invested If the increased capital is coming from employees, then this is just a circular transaction: the money goes from the employee, to the company, back to the employee again = no net financial difference. Founders get less money In the real world, founders borrow money, which forces them to be calculating and spendthrift with their cash. Fewer startups are created Oh no! Juicero would never have existed!...Wait, that's a good thing, and the very existence of Juicero and other wasteful startups suggests that the problem is too much capital, not too little.
  - conanbatt 9y ago
    > Actually, for non-startups (i.e., 99% of new businesses), loans from banks, family, and friends, are the primary form of investment. This method of investing does not require the investor to be accredited. Precisely because its illegal to do it otherwise..you are making my case for me with this statement. > If the increased capital is coming from employees, then this is just a circular transaction: the money goes from the employee, to the company, back to the employee again = no net financial difference. It could be divested from other less profitable capital investments like index funds, real estate or straight down cash. That lower competition of capital for startups means less startups and thus lower wages. > Oh no! Juicero would never have existed!...Wait, that's a good thing, and the very existence of Juicero and other wasteful startups suggests that the problem is too much capital, not too little. Thats your opinion, but you are making a comment on a site run by an institution whose primary goal is to make more startups.

by exogen 9y ago

Who's losing their life savings or ending up in financial ruin in this scenario? Also I've never even heard of a "predatory investor", I'm pretty sure you just made that up.

conanbatt 9y ago

If you are an investor, accreditation rules eliminate 95+% of the population as competition for your investment. That means you will get higher returns and better negotiation terms. Even founders cant invest in their own bethren! Think about that. YC startup founders could get together, talk to each other, and NOT be able to invest in each other. Neither could employees that have access to internal financials. You could believe your company is doing great, but you cannot invest. You dont have the chance to compete for the resource with the investors that can. This also means less money goes into investment. Result: - Qualified investors get higher returns - Employees get lower wages because there is less capital invested - Founders get less money - Fewer startups are created In the name of protecting compulsive gamblers?

exogen 9y ago
Yes, that all sounds fine. Protect average people, not startups trying to get rich. Yes. Yes. Yes. Life does not revolve around startups. Yes. Also, the people applying for home loans weren't compulsive gamblers. The banks literally told them they were qualified.
- conanbatt 9y ago
  You are protecting investors from competition. Harming startups, harming founders, employees and consumers.
  - exogen 9y ago
    That doesn't sound like a very big deal. Average people are suffering actual material harm at the hands of predatory companies and you're worried about startup founders?! "The poor startup founders, they have slightly less of a chance to make even more money!!!" – said no one, ever. This is the saddest argument for removing financial protections I've ever heard. Again, life does not revolve around startups.
    - conanbatt 9y ago
      You have more sympathy for investors than founders and employees? Put it up to a vote and the vast majority will do away with these restrictions. The people don't want it. Some people want it, and some people benefit from it. As its usual in economics, those groups are not the same. "Financial protections" => the government collects a tax to impose a restriction on you, to benefit the richest class.
gamblor956 9y ago
If you are an investor, accreditation rules eliminate 95+% of the population as competition for your investment. That means you will get higher returns and better negotiation terms. Actually, for non-startups (i.e., 99% of new businesses), loans from banks, family, and friends, are the primary form of investment. This method of investing does not require the investor to be accredited. Neither could employees that have access to internal financials. Investors are also not entitled to internal financials. They might have a right to financial statement, but those are very different things. Employees get lower wages because there is less capital invested If the increased capital is coming from employees, then this is just a circular transaction: the money goes from the employee, to the company, back to the employee again = no net financial difference. Founders get less money In the real world, founders borrow money, which forces them to be calculating and spendthrift with their cash. Fewer startups are created Oh no! Juicero would never have existed!...Wait, that's a good thing, and the very existence of Juicero and other wasteful startups suggests that the problem is too much capital, not too little.
- conanbatt 9y ago
  > Actually, for non-startups (i.e., 99% of new businesses), loans from banks, family, and friends, are the primary form of investment. This method of investing does not require the investor to be accredited. Precisely because its illegal to do it otherwise..you are making my case for me with this statement. > If the increased capital is coming from employees, then this is just a circular transaction: the money goes from the employee, to the company, back to the employee again = no net financial difference. It could be divested from other less profitable capital investments like index funds, real estate or straight down cash. That lower competition of capital for startups means less startups and thus lower wages. > Oh no! Juicero would never have existed!...Wait, that's a good thing, and the very existence of Juicero and other wasteful startups suggests that the problem is too much capital, not too little. Thats your opinion, but you are making a comment on a site run by an institution whose primary goal is to make more startups.