I'd like to think so, and it certainly would be nice if it turned out that way, but it's not entirely clear to me that that's inevitable. A difference between

I'd like to think so, and it certainly would be nice if it turned out that way, but it's not entirely clear to me that that's inevitable. A difference between investments of this kind and ordinary purchase transactions is that in the latter situation, the business selling the product expects to have repeat business. That is, there's a cycle wherein the business can sell a product, and the purchaser's reaction to the product can propagate through the market to influence subsequent transactions. In the case of an investment like this, however, the good being purchased, which is a future return, may not even be expected to be produced for years after the transaction occurs. There's no chance for the information cycle to work; all the investment occurs up front. A swindler may not even need to establish a positive reputation to attract investment; a good story would likely suffice. Indeed, that's the whole point, isn't it? I like the idea, but I think the per-person limits should be reduced by a factor of 10, maybe even 100. That won't lock swindlers out, but it will force them to work quite a bit harder.