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Do you know how much of a nightmare it would be for a small startup to deal with thousands of effectively anonymous investors, each of whom has only invested a
by defen 15y ago
Do you know how much of a nightmare it would be for a small startup to deal with thousands of effectively anonymous investors, each of whom has only invested a few tens or hundreds of dollars? You have to deal with voting rights, transfer of equity, shareholder lawsuits, etc, of people who you have no previous contact with and no way to vet. What's to stop a competitor from "investing" in your company to gain access to your financials? It just doesn't seem like the risks and costs are worth the reward.
- gus_massa 15y agoAnd another problem is that most of them are not "accredited investors". From: http://paulgraham.com/startupfunding.html http://paulgraham.com/startupfunding.html The SEC defines an "accredited investor" as someone with over a million dollars in liquid assets or an income of over $200,000 a year. The regulatory burden is much lower if a company's shareholders are all accredited investors. Once you take money from the general public you're more restricted in what you can do. [1]
- rpwilcox 15y agoI don't think that matters, in the post JOBS act world (in the US)