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This reminds me of Trump supporters who said, "Because he beat the IRS and paid zero taxes means he's smarter than the system." Your argument is along the same

This reminds me of Trump supporters who said, "Because he beat the IRS and paid zero taxes means he's smarter than the system." Your argument is along the same lines: Theil followed the law, ergo nothing "sinister" happened. Which is the same as: "It isn't sinister because there is no law." Yet, where did laws come from? Oh right, from people who have ethics. Because our ethics do not come from laws; our morals do, but not our ethics. Morality is an invented extension of ethics, which is codified into law when people think something shitty is happening (well, that's how it SHOULD happen... but that's the School-House-Rock version) IMHO, and many others (sadly, to your "dismay") Theil is being a greedy pig exploiting vagaries of the law for his MASSIVE gain, and there needs to be laws to prevent this kind of behavior because it is only available to the super wealthy, and it makes the elite class even more untouchable (plus a thousand other second-order effects).

bpodgursky 5y ago
This isn't some complicated double-dutch tax sheltering scheme though. It's functionally the same as using your Roth IRA to buy a lottery ticket and winning. The vast majority of startups fail. It's just a super simple investment that succeeded because his startup won.
- SavantIdiot 5y ago
  Again: I have a problem with someone investing in their startup using a government tax-protected shelter, and then making a killing off of it: that is double dipping, and scum-baggy. Simple law: you cannot invest in your own company in your own Roth IRA because it is blatantly unfair to other investors who don't have similar insider trading abilities. Done.
  - cscurmudgeon 5y ago
    > Simple law: you cannot invest in your own company in your own Roth IRA because it is blatantly unfair to other investors who don't have similar insider trading abilities. Why can't other investors create their own startups and invest their money similarly? Startup founders take a lot of risk. There is a big chance his investment could have been zero. It is strange that ProPublica does not understand this basic concept. Where is their report on millions of Roth accounts that went to zero?
    - SavantIdiot 5y ago
      > It is strange ProPublica not understand this basic concept. One could ask how you demonstrably cannot understand the conflation of two unrelated concepts? Concept A: taking a risk to create a startup that you hope becomes a profitable company by executing to its core competency Concept B: investing in your own company through a tax vagary with an investment device that has nothing to do with startup (or a particular startup) Seems clear as day to me. https://www.youtube.com/watch?v=BPX-wuplDvc https://www.youtube.com/watch?v=BPX-wuplDvc
    - diob 5y ago
      The paltry amount he invested was hardly a risk. Had it not panned out, he would have been out basically zilch.
      - cscurmudgeon 5y ago
        He was a founder. His investment was not just financial. When he invested, he was not ultra rich. So a loss would have been significant. Remember, we can't see the future. By your logic: You are free to invest like him in early stage startups. You will be out zilch, so why not do what he did?
        nrmitchi 5y ago
        > By your logic: You are free to invest like him in early stage startups. You will be out zilch, so why not do what he did? 1. Accredited investor rules 2. Please find me a startup which will allow me to buy shares at $0.001/share while simultaneous selling to other investors at a price of 500k[0]. 3. If you say to start my own and invest in my own company that I am working for in my Roth, I'll remind you that it's explicit not allowed, and the fact that it's not allowed is the thing that most people are taking issue with. [0] Yes, that's not the full valuation issue, but it's enough to see that the value at the time wasn't really legitimate.
        diob 5y ago
        "With financial support from friends and family, he raised $1 million" - from his wiki. Yeah, I don't think this person was hurting for the paltry sum they invested. It also sounds like they would've been just fine if it had failed (aka just move on to the next venture until you hit jackpot). The rich get richer I guess, and random folks on the internet applaud the pilfering of the commons (dodging taxes).
  - nrmitchi 5y ago
    I mean, you're already not allowed to use a Roth to invest in a company that you're an officer of, major shareholder in, etc (with many other restrictions), so I'm not sure how adding a new law would have changed this (since the existing ones appear to have just been ignored)

bpodgursky 5y ago

This isn't some complicated double-dutch tax sheltering scheme though. It's functionally the same as using your Roth IRA to buy a lottery ticket and winning. The vast majority of startups fail. It's just a super simple investment that succeeded because his startup won.

SavantIdiot 5y ago
Again: I have a problem with someone investing in their startup using a government tax-protected shelter, and then making a killing off of it: that is double dipping, and scum-baggy. Simple law: you cannot invest in your own company in your own Roth IRA because it is blatantly unfair to other investors who don't have similar insider trading abilities. Done.
- cscurmudgeon 5y ago
  > Simple law: you cannot invest in your own company in your own Roth IRA because it is blatantly unfair to other investors who don't have similar insider trading abilities. Why can't other investors create their own startups and invest their money similarly? Startup founders take a lot of risk. There is a big chance his investment could have been zero. It is strange that ProPublica does not understand this basic concept. Where is their report on millions of Roth accounts that went to zero?
  - SavantIdiot 5y ago
    > It is strange ProPublica not understand this basic concept. One could ask how you demonstrably cannot understand the conflation of two unrelated concepts? Concept A: taking a risk to create a startup that you hope becomes a profitable company by executing to its core competency Concept B: investing in your own company through a tax vagary with an investment device that has nothing to do with startup (or a particular startup) Seems clear as day to me. https://www.youtube.com/watch?v=BPX-wuplDvc https://www.youtube.com/watch?v=BPX-wuplDvc
  - diob 5y ago
    The paltry amount he invested was hardly a risk. Had it not panned out, he would have been out basically zilch.
    - cscurmudgeon 5y ago
      He was a founder. His investment was not just financial. When he invested, he was not ultra rich. So a loss would have been significant. Remember, we can't see the future. By your logic: You are free to invest like him in early stage startups. You will be out zilch, so why not do what he did?
      - nrmitchi 5y ago
        > By your logic: You are free to invest like him in early stage startups. You will be out zilch, so why not do what he did? 1. Accredited investor rules 2. Please find me a startup which will allow me to buy shares at $0.001/share while simultaneous selling to other investors at a price of 500k[0]. 3. If you say to start my own and invest in my own company that I am working for in my Roth, I'll remind you that it's explicit not allowed, and the fact that it's not allowed is the thing that most people are taking issue with. [0] Yes, that's not the full valuation issue, but it's enough to see that the value at the time wasn't really legitimate.
      - diob 5y ago
        "With financial support from friends and family, he raised $1 million" - from his wiki. Yeah, I don't think this person was hurting for the paltry sum they invested. It also sounds like they would've been just fine if it had failed (aka just move on to the next venture until you hit jackpot). The rich get richer I guess, and random folks on the internet applaud the pilfering of the commons (dodging taxes).
- nrmitchi 5y ago
  I mean, you're already not allowed to use a Roth to invest in a company that you're an officer of, major shareholder in, etc (with many other restrictions), so I'm not sure how adding a new law would have changed this (since the existing ones appear to have just been ignored)