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One jump ahead of the lawmen. Impressive. I would think this is heading for trouble, though. The SEC and public policy in this area are oriented toward prote

by zach 16y ago

One jump ahead of the lawmen. Impressive. I would think this is heading for trouble, though. The SEC and public policy in this area are oriented toward protecting non-accredited investors (let's call them "noobs") from the potential hazards of stock ownership (getting "pwned"). Now that being public (and even widely-held) is onerous, setting up a noob-free server (a private market) seems like a win. The company gets liquidity, the noobs have no chance of getting pwned, everyone should be happy. But this particular innovation is a little concerning, because it's primarily going to appeal to noobs and the total amount of noobs at risk of pwnage can get much larger than intended. That's when the regulators are going to step in. So as clever as this seems, this is just begging for trouble.

nl 16y ago
This isn't about avoiding non-accredited investor laws, it's about the 499 shareholder limit for non-financial disclosure. Google ran into the same problem in the run-up to their IPO
- deleted 16y ago
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- zach 16y ago
  It is primarily about that (q.v. my post on RSUs). But if this reaches an extreme where hundreds of non-accredited investors (very) indirectly hold ownership in a private company, it's far more likely to raise regulatory and legislative eyebrows. Today, I presume they don't need to hassle with non-accredited investors because the demand is so huge. But the door would seem to be open to this in the future since there's not much to stop it, possibly apart from Facebook's control over transactions. I admit it's a far-ahead concern. But it's a real danger.
roel_v 16y ago
Don't non-accredited investor regulations only kick in under a certain investment floor under SEC regulations? They do here in most of Europe, there are plenty of shady investment opportunities here for people with more than 50k to invest - to the point where my spidey sense starts to tingle when I see a commercial on TV saying 'minimum inlay 50k'. (come to think of it, haven't seen many of them over the last year or so - a couple of people went to jail or worse over some real estate funds gone sour, seems to have stopped that industry dead in its tracks).

by zach 16y ago

nl 16y ago

This isn't about avoiding non-accredited investor laws, it's about the 499 shareholder limit for non-financial disclosure. Google ran into the same problem in the run-up to their IPO

deleted 16y ago
[deleted]
zach 16y ago
It is primarily about that (q.v. my post on RSUs). But if this reaches an extreme where hundreds of non-accredited investors (very) indirectly hold ownership in a private company, it's far more likely to raise regulatory and legislative eyebrows. Today, I presume they don't need to hassle with non-accredited investors because the demand is so huge. But the door would seem to be open to this in the future since there's not much to stop it, possibly apart from Facebook's control over transactions. I admit it's a far-ahead concern. But it's a real danger.

roel_v 16y ago

Don't non-accredited investor regulations only kick in under a certain investment floor under SEC regulations? They do here in most of Europe, there are plenty of shady investment opportunities here for people with more than 50k to invest - to the point where my spidey sense starts to tingle when I see a commercial on TV saying 'minimum inlay 50k'. (come to think of it, haven't seen many of them over the last year or so - a couple of people went to jail or worse over some real estate funds gone sour, seems to have stopped that industry dead in its tracks).