Or, it's a way to ensure that Wall Street gets a (large) cut of any investment made in a startup company by "normal" people. For example, let's take the words o

Or, it's a way to ensure that Wall Street gets a (large) cut of any investment made in a startup company by "normal" people. For example, let's take the words of Seymour Cray: The company raised $600,000 which was a huge amount of money in those days. It was done in a way that we can't do anymore. It was done on the street corner where people would stop by and say "Oh, what are you selling?" And you'd say "Oh, we're selling stock in a new company and its a dollar". And people bought a few dollars here and a few dollars there. There were no large investors in Control Data Corporation. I risked most of my assets. $5,000 dollars I invested which was a huge sum of money. It turned out to be a much bigger sum of money. It is interesting how our protective mechanisms over the years prevented such wild things from happening. Now it takes you six months to get approvals to do start any kind of an operation. http://americanhistory.si.edu/collections/comphist/cray.htm http://americanhistory.si.edu/collections/comphist/cray.htm