3 ms·
FWIW, I think AngelList is already planning to do that bundling via SecondMarket with their crowd-funding offering: https://angel.co/help/invest#invest-3 https:
by jrkelly 14y ago
FWIW, I think AngelList is already planning to do that bundling via SecondMarket with their crowd-funding offering:
https://angel.co/help/invest#invest-3 https://angel.co/help/invest#invest-3
Q: Do startups have to deal with a million new investors?
No. The overhead is the same as adding a single large investor to the round.
All of the investors are pooled into a single fund which, in turn, invests in the startup. Only the fund is listed on the company's cap table—the individual investors are not. The fund also signs the investment documents, the individual investors do not.
- rexreed 14y agoThis is the right approach, I believe. However, it has not yet been tested in the courts if an investor in the pool sues when he/she feel wronged when a future investor tries to cram down all these investors in a down round. It's inevitable to happen at some point, and it will probably be an issue given that most investors in the crowdfunding approach will be unaccredited investors. Right now as it stands, Second Market is only available to accredited investors (https://angel.co/help/invest#secondmarket https://angel.co/help/invest#secondmarket) and so the JOBS act crowdfunding rules don't apply here in the same way.