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I agree their needs to be a way for a mass of small investors to "negotiate" a valuation and terms but setting up "qualified venture capital" firms as a proxy i
by asmithmd1 15y ago
I agree their needs to be a way for a mass of small investors to "negotiate" a valuation and terms but setting up "qualified venture capital" firms as a proxy is not the way to go. Who qualifies the venture capital companies?
How about the terms are posted and a dutch auction takes place to fill the round. In a dutch auction every potential investor who bids over the price required to fill the round gets in at the lowest price.
- xanados 15y agoA dutch auction can't work for some of the other reasons I mentioned. The terms in a venture capital transaction are as critical in making fund returns as the valuation, and a formal auction can only optimize one variable at a time. The terms are too complex for the average $1000 investor, really. You'd end up with investors getting burned.