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It would be interesting to see if reducing reporting requirements allows more startups to go public earlier in their journey, hence opening up more opportunitie

It would be interesting to see if reducing reporting requirements allows more startups to go public earlier in their journey, hence opening up more opportunities for public to participate in the upside!

paxys 7mo ago
Just look at the track record of SPACs for a preview of how that will turn out.
- sashank_1509 7mo ago
  I think it’s still fine. I’ve invested a lot into some SPAC’s. I’m good on 1, break even on the other. And I’ll keep holding it, since these companies are still pre-revenue and I hope they 100X. The overall idea of SPAC’s is not bad, even if Chamath only created them to exit his sh*t investments. There are very few other ways for retail investors to invest in potential 100-1000X companies (which are generally pre-revenue). Of course the flip side, is that most SPAC’s might close down and cause you to lose money. That is the decision for the investor to make, risky opportunities are fine! Sadly chamaths shitty tactics to close out his investments have tainted a completely fine idea.
  - gzread 7mo ago
    Have you tried reaching out privately to those companies you want to invest in? Stock trading doesn't only happen on stock markets, and the rationale for publicly traded companies being so regulated is because they're so easy to invest in.
    - sashank_1509 7mo ago
      That’s much harder. If it’s a big private company like OpenAI, you need a minimum 50k investment. For smaller companies, the number is much higher I assume.
      - gzread 7mo ago
        Yes. Can you really invest only 50k into OpenAI? That seems low to me. However, some small companies are okay with small investments. You have to negotiate privately, that's just how it is. If it was a simple, uniform process, they'd be on the stock market.
  - jordanb 7mo ago
    > even if Chamath only created them to exit his sh*t investments. There are very few other ways for retail investors to invest in potential 100-1000X companies "I have this exciting bag-holding opportunity for you."
  - donavanm 7mo ago
    Dude. SPACs are structurally a _terrible_ idea for any non-privileged investor. The sponsors 20-25% comp, the early warrants, etc. All of those costs are taken out of the bag-holder, sorry “investors”, expected value. The entire thing is setup to maximise info asymmetry and perverse incentives for the sponsors at the cost of bag holders. The “shitty tactics” _are why SPACs exist_.
    - sashank_1509 7mo ago
      Even so, VRT has gone up 2000% since it SPACC’ed. RKLB was also a SPAC. A SPAC is a just a way to satisfy regulations as a pre-revenue early stage company. Most early stage companies fail, and that’s fine. If such a company succeeds and still retail investors, don’t get paid back, I would consider that fraudulent, but that’s not the case with SPAC’s. I would like to see SPAC deals be better to investors as opposed to banning them entirely.
  - JumpCrisscross 7mo ago
    > overall idea of SPAC’s is not bad It is. It’s a workaround. More directly, SPACs are financially engineered to extract wealth from retail. Every weird interest-rate, guaranteed-floor and private-placement provision is geared for it. We have a crap IPO process, in part due to reporting requirements, so sometimes the gamble works out.
jrochkind1 7mo ago
Can you connect the dots for me, why would reduced reporting requirements allow more startups to go public earlier?
- cj 7mo ago
  Some people argue that the requirements placed on public companies (like mandatory quarterly reporting) add operational overhead that might cause a company to postpone an IPO until they're larger or more established. In practice, companies like Stripe, OpenAI, etc have stayed private because they've been able to access the cash they need at valuations they're happy with and because no one wants to open their books unless they have to. They aren't staying private because being a public company is hard.
- jordanb 7mo ago
  Combining this with a SPAC a startup would be able to have a six month runway as a public company before having to disclose finances. I imagine that would be attractive to some firms.
  - donavanm 7mo ago
    Weird, why wouldnt this fantastic startup want to report on their performance in a standardized and accountable manner for six months after collecting public money to pay out insiders and “sponsors”? Surely they wouldnt mind bragging about their fantastic GAAP P&L in their filing docs. Maybe its the pesky quiet period theyre trying to avoid, so they can be even more transparent about finances and equity holders.
gnulinux996 7mo ago
But mostly downside

paxys 7mo ago

Just look at the track record of SPACs for a preview of how that will turn out.

sashank_1509 7mo ago
I think it’s still fine. I’ve invested a lot into some SPAC’s. I’m good on 1, break even on the other. And I’ll keep holding it, since these companies are still pre-revenue and I hope they 100X. The overall idea of SPAC’s is not bad, even if Chamath only created them to exit his sh*t investments. There are very few other ways for retail investors to invest in potential 100-1000X companies (which are generally pre-revenue). Of course the flip side, is that most SPAC’s might close down and cause you to lose money. That is the decision for the investor to make, risky opportunities are fine! Sadly chamaths shitty tactics to close out his investments have tainted a completely fine idea.
- gzread 7mo ago
  Have you tried reaching out privately to those companies you want to invest in? Stock trading doesn't only happen on stock markets, and the rationale for publicly traded companies being so regulated is because they're so easy to invest in.
  - sashank_1509 7mo ago
    That’s much harder. If it’s a big private company like OpenAI, you need a minimum 50k investment. For smaller companies, the number is much higher I assume.
    - gzread 7mo ago
      Yes. Can you really invest only 50k into OpenAI? That seems low to me. However, some small companies are okay with small investments. You have to negotiate privately, that's just how it is. If it was a simple, uniform process, they'd be on the stock market.
- jordanb 7mo ago
  > even if Chamath only created them to exit his sh*t investments. There are very few other ways for retail investors to invest in potential 100-1000X companies "I have this exciting bag-holding opportunity for you."
- donavanm 7mo ago
  Dude. SPACs are structurally a _terrible_ idea for any non-privileged investor. The sponsors 20-25% comp, the early warrants, etc. All of those costs are taken out of the bag-holder, sorry “investors”, expected value. The entire thing is setup to maximise info asymmetry and perverse incentives for the sponsors at the cost of bag holders. The “shitty tactics” _are why SPACs exist_.
  - sashank_1509 7mo ago
    Even so, VRT has gone up 2000% since it SPACC’ed. RKLB was also a SPAC. A SPAC is a just a way to satisfy regulations as a pre-revenue early stage company. Most early stage companies fail, and that’s fine. If such a company succeeds and still retail investors, don’t get paid back, I would consider that fraudulent, but that’s not the case with SPAC’s. I would like to see SPAC deals be better to investors as opposed to banning them entirely.
- JumpCrisscross 7mo ago
  > overall idea of SPAC’s is not bad It is. It’s a workaround. More directly, SPACs are financially engineered to extract wealth from retail. Every weird interest-rate, guaranteed-floor and private-placement provision is geared for it. We have a crap IPO process, in part due to reporting requirements, so sometimes the gamble works out.

jrochkind1 7mo ago

Can you connect the dots for me, why would reduced reporting requirements allow more startups to go public earlier?

cj 7mo ago
Some people argue that the requirements placed on public companies (like mandatory quarterly reporting) add operational overhead that might cause a company to postpone an IPO until they're larger or more established. In practice, companies like Stripe, OpenAI, etc have stayed private because they've been able to access the cash they need at valuations they're happy with and because no one wants to open their books unless they have to. They aren't staying private because being a public company is hard.
jordanb 7mo ago
Combining this with a SPAC a startup would be able to have a six month runway as a public company before having to disclose finances. I imagine that would be attractive to some firms.
- donavanm 7mo ago
  Weird, why wouldnt this fantastic startup want to report on their performance in a standardized and accountable manner for six months after collecting public money to pay out insiders and “sponsors”? Surely they wouldnt mind bragging about their fantastic GAAP P&L in their filing docs. Maybe its the pesky quiet period theyre trying to avoid, so they can be even more transparent about finances and equity holders.

gnulinux996 7mo ago

But mostly downside