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From my perspective, because usually I don't find many want-to-be angels who don't meet the qualifications and can supply the amount of funding I would be willi
by Brushfire 18y ago
From my perspective, because usually I don't find many want-to-be angels who don't meet the qualifications and can supply the amount of funding I would be willing to deal with.
I'd rather deal with 3 people giving 200k than 30 people giving 20k. The downside of relaxing the accredited investor rule is the con artists will come out of the woodworks to get blind, senile grandma to invest in "amazing business opportunities". Personally, I think the rules are about right as they are. See above about LLC bypass if you really have a current need and can convince your non-accredited investors to go through the hassle.
- tptacek 18y agoSee above, and then consider that if people could invest $500 in your startup, someone else could build a business creating a liquid market in startup equity, which you could then tap for funds in an arbitrary amount.
- Brushfire 18y agoYes, I've thought of this before. But I'd rather deal with loans than equity if the equity doesnt also give expertise. The type of quick equity fund you describe would likely have to offer convertible debt (ie lending) or force the risk of being crammed down regularly. And without the expertise, there is no downside for the entrepreneur to screw these $500 investors out of their money regularly. So if you are already lending (convertible debt->equity) then how is this different from microlending? Regardless, I see your point about flexibility, I just personally cant see it as all that much more useful than microlending for either side.