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A stock market is set up to trade fungible bits of paper that have been contractually linked to companies (securities), commodities (futures), or derivatives li
by jmcmichael 18y ago
A stock market is set up to trade fungible bits of paper that have been contractually linked to companies (securities), commodities (futures), or derivatives like options. The algorithms for pricing and linking up buyers and sellers of these fungible bits of are fairly straightfoward.
The types of contracts involved in initial investment in an idea or company aren't fungible, and tend to be highly customized affairs between the VC, the founders, and their lawyers.
- maxwell 18y agoIn other words, the algorithms (and interfaces (and laws?)) for scalable venture investment are immature, meaning it's still in the domain of trained professionals, like using software before GUIs.
- elai 18y agoIt's purely the laws that force that.
- kingkongrevenge 18y ago> The algorithms for pricing and linking up buyers and sellers of these fungible bits of are fairly straightfoward. Yes, but maintaining liquidity in a dynamic environment probably requires market makers, no? I don't think there's an algorithmic solution. You need the specialists.