4 ms·

This is not all that crazy. To be perfectly honest, reading this was quite a shock, though. This is (loosely) the idea I have outlined for RailsRumble 08, com

by qhoxie 18y ago

This is not all that crazy. To be perfectly honest, reading this was quite a shock, though. This is (loosely) the idea I have outlined for RailsRumble 08, coming up this weekend. Ours will not (at first) involve exchange of real money, but the concept will be the same: 'Normal' people will be able to choose startups they find promising and invest in them.

run4yourlives 18y ago
Haha, well... maybe you're onto something then. Good luck to you!
- qhoxie 18y ago
  Thanks! I've definitely got some technicalities to figure out before Friday.
  - run4yourlives 18y ago
    My biggest issue is that it seems so obvious that there's got to be something fundamentally flawed with the idea. At first I thought it might be illegal, but I'm not seeing how that could be.
    - qhoxie 18y ago
      Let us hope for my sake that it is not illegal :)
    - nostrademons 18y ago
      I would definitely check with a lawyer before doing something like this. There're certain situations where you need to be an "accredited investor" (liquid net worth > $1M) to take money from the public. I know hedge funds are one of these; I think private companies are another. If a private company has more than a certain number of shareholders, they need to file disclosures as if they were a public company; this is why Google went public. These protections were put in place after the crash of 29, when a great many ordinary investors lost their money investing in companies that weren't much more than a piece of paper. Again, talk to a lawyer. This is one area you don't want to dick around in without good legal advice.
      - run4yourlives 18y ago
        Good advice, but what about Kiva.org? Don't they essentially act in the same way? Granted, there is no real return offered.
        nostrademons 18y ago
        I'm not a lawyer and hence not qualified to give legal advice. I can only speculate (always a dangerous thing)... I'm guessing that it has everything to do with a real return not being guaranteed. Same goes for Prosper.com and MicroPledge. Anyone can raise money for anything on the Internet: folks do whip-rounds via Paypal to buy friends a new laptop. But if you want the legal guarantees of stock ownership, etc, you need to file the appropriate disclosures. </not-legal-advice>
        run4yourlives 18y ago
        Heh, this is pretty interesting: http://www.prosper.com/help/topics/lender-quiet_period.aspx http://www.prosper.com/help/topics/lender-quiet_period.aspx
        cabalamat 18y ago
        You're right, lenders on Kiva aren't paid interest. Kiva's founders have said this is so they don't have to comply with burdensome investment legislation.
        aasarava 18y ago
        Lenders to Kiva also aren't buying securities -- they're providing money to a microfinance institution which then distributes the money as promised, hopefully to return it later. Should the loan not be repaid, the lender has no rights to any assets.
      - hollerith 18y ago
        There're certain situations where you need to be an "accredited investor" (liquid net worth > $1M) to take money from the public. I know hedge funds are one of these You need to be an accredited investor to put money into a hedge fund. Anyway, what the world really needs is not a new stock market but rather a new banking system.
mattmaroon 18y ago
You really don't want to mess around with this without consulting a lawyer first. A misstep could mean committing multiple felonies and possible jail time. Seriously, talk to a lawyer.
- qhoxie 18y ago
  Right, hence my saying that it will be ficticious in its initial incarnation.
  - mattmaroon 18y ago
    As long as you're not taking in real money or paying out real prizes, you're OK. It is actually illegal in some states to pay out real prizes even if the entry is free due to sweepstakes laws, and there you get into the 'consult your laywer' area. But even then, the odds of anyone ever prosecuting you for giving stuff away are virtually non-existent.
- Diogenes 18y ago
  Never talk to a lawyer until money is about to change hands. More good ideas are killed, deformed or outright stolen by lawyers than by any other means...ever.

by qhoxie 18y ago

run4yourlives 18y ago

Haha, well... maybe you're onto something then. Good luck to you!

qhoxie 18y ago
Thanks! I've definitely got some technicalities to figure out before Friday.
- run4yourlives 18y ago
  My biggest issue is that it seems so obvious that there's got to be something fundamentally flawed with the idea. At first I thought it might be illegal, but I'm not seeing how that could be.
  - qhoxie 18y ago
    Let us hope for my sake that it is not illegal :)
  - nostrademons 18y ago
    I would definitely check with a lawyer before doing something like this. There're certain situations where you need to be an "accredited investor" (liquid net worth > $1M) to take money from the public. I know hedge funds are one of these; I think private companies are another. If a private company has more than a certain number of shareholders, they need to file disclosures as if they were a public company; this is why Google went public. These protections were put in place after the crash of 29, when a great many ordinary investors lost their money investing in companies that weren't much more than a piece of paper. Again, talk to a lawyer. This is one area you don't want to dick around in without good legal advice.
    - run4yourlives 18y ago
      Good advice, but what about Kiva.org? Don't they essentially act in the same way? Granted, there is no real return offered.
      - nostrademons 18y ago
        I'm not a lawyer and hence not qualified to give legal advice. I can only speculate (always a dangerous thing)... I'm guessing that it has everything to do with a real return not being guaranteed. Same goes for Prosper.com and MicroPledge. Anyone can raise money for anything on the Internet: folks do whip-rounds via Paypal to buy friends a new laptop. But if you want the legal guarantees of stock ownership, etc, you need to file the appropriate disclosures. </not-legal-advice>
        run4yourlives 18y ago
        Heh, this is pretty interesting: http://www.prosper.com/help/topics/lender-quiet_period.aspx http://www.prosper.com/help/topics/lender-quiet_period.aspx
      - cabalamat 18y ago
        You're right, lenders on Kiva aren't paid interest. Kiva's founders have said this is so they don't have to comply with burdensome investment legislation.
        aasarava 18y ago
        Lenders to Kiva also aren't buying securities -- they're providing money to a microfinance institution which then distributes the money as promised, hopefully to return it later. Should the loan not be repaid, the lender has no rights to any assets.
    - hollerith 18y ago
      There're certain situations where you need to be an "accredited investor" (liquid net worth > $1M) to take money from the public. I know hedge funds are one of these You need to be an accredited investor to put money into a hedge fund. Anyway, what the world really needs is not a new stock market but rather a new banking system.

mattmaroon 18y ago

You really don't want to mess around with this without consulting a lawyer first. A misstep could mean committing multiple felonies and possible jail time. Seriously, talk to a lawyer.

qhoxie 18y ago
Right, hence my saying that it will be ficticious in its initial incarnation.
- mattmaroon 18y ago
  As long as you're not taking in real money or paying out real prizes, you're OK. It is actually illegal in some states to pay out real prizes even if the entry is free due to sweepstakes laws, and there you get into the 'consult your laywer' area. But even then, the odds of anyone ever prosecuting you for giving stuff away are virtually non-existent.
Diogenes 18y ago
Never talk to a lawyer until money is about to change hands. More good ideas are killed, deformed or outright stolen by lawyers than by any other means...ever.