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The stock market would have to be privately run, and the company running it would set rules for all listed companies ( such as stock purchased by investors is p
by bokonist 18y ago
The stock market would have to be privately run, and the company running it would set rules for all listed companies ( such as stock purchased by investors is preferred, employee shares cannot be sold until certain milestones are hit, etc). There would be a cost of compliance with these rules, but I bet it would be more efficient for the startups than raising money through the existing Angel/VC route. Some of the compliance could be automatic, such as reporting software that integrated with Salesforce or Google Analytics.
- tptacek 18y agoYou cannot simply set up a "private stock market" to bypass SEC rules. To purchase non-registered securities, you need to make more than $200k/year or have more than $1MM in assets, and attest to "accredited investor" status.
- bokonist 18y agoMaybe the market could be run out of a foreign country? Or perhaps the investments would be funneled through a holding company that was SEC registered? In other words, the holding company would own the stock in the startup, and the small time investor would purchase contracts from the holding company that would pay back cash in the event of a liquidity event for the desired startup.