5 ms·

Congress needs to allow "poor" people to become investors, that'd make Kickstarter 1000X more effective because you'd be able to purchase shares in these compan

by wissler 14y ago

Congress needs to allow "poor" people to become investors, that'd make Kickstarter 1000X more effective because you'd be able to purchase shares in these companies rather than merely being promised a one-time thing.

eggbrain 14y ago
What your talking about is the JOBS act (http://en.wikipedia.org/wiki/Jumpstart_Our_Business_Startups_Act http://en.wikipedia.org/wiki/Jumpstart_Our_Business_Startups...), and it should be going into effect soon.
InclinedPlane 14y ago
They already have, and it should take legal force soon. It won't be all sunshine and roses though, there will be plenty of scammers who will abuse the system and take advantage of people. But that's true with every form and variety of investment.
pdog 14y ago
Really? How is owning a stake in the venture worth a thousand times more than owning the thing?
- wissler 14y ago
  I can't tell whether you missed my point or are making a nitpicking remark about how I chose to express it. Of course, it's the same cause either way.
- InclinedPlane 14y ago
  Not all ventures necessarily produce tangible products for everyone who might be interested in financing them. For example, I am not a coffee drinker but there was a very interesting kickstarter for an espresso maker (zpm espresso) that I made note of. The people behind it seemed to know what they were about and seemed to have an interesting and novel idea with a lot of potential. For me it would have been a good investment potential, but that wasn't an option. Similarly, someone might come up with a great new idea on how to manufacture carbon composites or build satellites and want crowd funding to help get it off the ground, but they will have more trouble using kickstarter and such-like because they can't deliver the fruits of their project to their supporters the way other projects could. In some ways this is fine, and I think that kickstarter is and should be as much about helping to bring something to fruition as it is about buying things that don't exist yet. However, it is limiting, and it would be very beneficial to many projects if they could provide equity in a venture in exchange for funding. Congress has passed a law which should enable just that, in a limited way, and time will tell how successful such things become.
peterhajas 14y ago
If people have the financial resources, then they can be an investor. I do not understand why the government should subsidize investors, or give "'poor'" people investing power.
- InclinedPlane 14y ago
  From your statement it doesn't seem as though you understand the law or the original poster's intent. There's nothing about subsidization here, only allowing people to use their own money how they wish. Currently investment is heavily regulated. If you want to own part of a business then there are a huge list of conditions which must be satisfied by you or by the business or both. Publicly traded companies, for example, are extensively regulated by the securities and exchange commission. Smaller, private companies however cannot seek investment from just anyone. In order to be an "angel investor", for example, you need to prove that you have maintained an annual income of over $200k for at least 2 years. Only within the last year has congress changed these laws, and those changes have yet to go into effect in practice. And even then the new changes limit the percentage of one's annual income anyone can invest in a "crowdfunded" company.
  - peterhajas 14y ago
    Whoops, my apologies for misunderstanding. These investment regulations seem like poor ones, and should be removed. I'm totally in agreement here.
pekk 14y ago
In what way has Congress forbidden poor people from buying shares in companies?
- InclinedPlane 14y ago
  By making laws against it. Anyone can buy as many shares of a publicly traded company as they want, but investment in privately held companies is severely regulated and generally limited to only the very rich (in the top 3% of income earners). Even after the JOBS act goes into effect people making less than $40k/yr would only be able to invest 2% of their annual income ($800/yr) in such companies legally.
  - angryasian 14y ago
    I think it has to do more that how can anyone make an informed decision on investment if private companies are not required to release financial data.
nakedrobot2 14y ago
from this article: http://allthingsd.com/20121105/kickstarter-ceo-no-ipo-for-us-and-no-equity-crowdfunding-either/ http://allthingsd.com/20121105/kickstarter-ceo-no-ipo-for-us... " Kickstarter has no plans to get into equity crowdfunding — where small backers would get a piece of the companies they fund — despite legislative efforts like the JOBS Act to make such investments more accessible and legal. “We think the most disruptive aspect [of Kickstarter] is the removal of the investment component,” Chen said. “People are supporting projects because they want to see them happen. It’s so different than giving money because you want to make a profit.” "
- zanny 14y ago
  I think they are right, that is where all information based media needs to head. It is a bygone concept to keep charging per unit for something infinite and have it funded by people trying to make money off the sales. Makes much more sense for people to put money into what they want and directly fund it.
- wissler 14y ago
  If Kickstarter wouldn't support micro-investment then someone else would, and if they also supported the Kickstarter model, I see no reason why Kickstarter would prevail in the long term. I've read that Valve Software would like to fund games on this model but as of now they can't legally do it.

by wissler 14y ago

eggbrain 14y ago

What your talking about is the JOBS act (http://en.wikipedia.org/wiki/Jumpstart_Our_Business_Startups_Act http://en.wikipedia.org/wiki/Jumpstart_Our_Business_Startups...), and it should be going into effect soon.

InclinedPlane 14y ago

They already have, and it should take legal force soon. It won't be all sunshine and roses though, there will be plenty of scammers who will abuse the system and take advantage of people. But that's true with every form and variety of investment.

pdog 14y ago

Really? How is owning a stake in the venture worth a thousand times more than owning the thing?

wissler 14y ago
I can't tell whether you missed my point or are making a nitpicking remark about how I chose to express it. Of course, it's the same cause either way.
InclinedPlane 14y ago
Not all ventures necessarily produce tangible products for everyone who might be interested in financing them. For example, I am not a coffee drinker but there was a very interesting kickstarter for an espresso maker (zpm espresso) that I made note of. The people behind it seemed to know what they were about and seemed to have an interesting and novel idea with a lot of potential. For me it would have been a good investment potential, but that wasn't an option. Similarly, someone might come up with a great new idea on how to manufacture carbon composites or build satellites and want crowd funding to help get it off the ground, but they will have more trouble using kickstarter and such-like because they can't deliver the fruits of their project to their supporters the way other projects could. In some ways this is fine, and I think that kickstarter is and should be as much about helping to bring something to fruition as it is about buying things that don't exist yet. However, it is limiting, and it would be very beneficial to many projects if they could provide equity in a venture in exchange for funding. Congress has passed a law which should enable just that, in a limited way, and time will tell how successful such things become.

peterhajas 14y ago

If people have the financial resources, then they can be an investor. I do not understand why the government should subsidize investors, or give "'poor'" people investing power.

InclinedPlane 14y ago
From your statement it doesn't seem as though you understand the law or the original poster's intent. There's nothing about subsidization here, only allowing people to use their own money how they wish. Currently investment is heavily regulated. If you want to own part of a business then there are a huge list of conditions which must be satisfied by you or by the business or both. Publicly traded companies, for example, are extensively regulated by the securities and exchange commission. Smaller, private companies however cannot seek investment from just anyone. In order to be an "angel investor", for example, you need to prove that you have maintained an annual income of over $200k for at least 2 years. Only within the last year has congress changed these laws, and those changes have yet to go into effect in practice. And even then the new changes limit the percentage of one's annual income anyone can invest in a "crowdfunded" company.
- peterhajas 14y ago
  Whoops, my apologies for misunderstanding. These investment regulations seem like poor ones, and should be removed. I'm totally in agreement here.

pekk 14y ago

In what way has Congress forbidden poor people from buying shares in companies?

InclinedPlane 14y ago
By making laws against it. Anyone can buy as many shares of a publicly traded company as they want, but investment in privately held companies is severely regulated and generally limited to only the very rich (in the top 3% of income earners). Even after the JOBS act goes into effect people making less than $40k/yr would only be able to invest 2% of their annual income ($800/yr) in such companies legally.
- angryasian 14y ago
  I think it has to do more that how can anyone make an informed decision on investment if private companies are not required to release financial data.

nakedrobot2 14y ago

from this article: http://allthingsd.com/20121105/kickstarter-ceo-no-ipo-for-us-and-no-equity-crowdfunding-either/ http://allthingsd.com/20121105/kickstarter-ceo-no-ipo-for-us... " Kickstarter has no plans to get into equity crowdfunding — where small backers would get a piece of the companies they fund — despite legislative efforts like the JOBS Act to make such investments more accessible and legal. “We think the most disruptive aspect [of Kickstarter] is the removal of the investment component,” Chen said. “People are supporting projects because they want to see them happen. It’s so different than giving money because you want to make a profit.” "

zanny 14y ago
I think they are right, that is where all information based media needs to head. It is a bygone concept to keep charging per unit for something infinite and have it funded by people trying to make money off the sales. Makes much more sense for people to put money into what they want and directly fund it.
wissler 14y ago
If Kickstarter wouldn't support micro-investment then someone else would, and if they also supported the Kickstarter model, I see no reason why Kickstarter would prevail in the long term. I've read that Valve Software would like to fund games on this model but as of now they can't legally do it.