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I think it's going to be very interesting to see how this plays out. For one thing, I expect it to continue the trend of shifting the balance of power from inv

I think it's going to be very interesting to see how this plays out. For one thing, I expect it to continue the trend of shifting the balance of power from investors to founders. Basically, this will be a huge amount of new competition for angel investors. And crowdinvestors don't have voting rights or a board seat. In order to continue to get into deals they want, angels and VCs will have to bring more value to the table and accept less favorable terms. So I would guess, anyway. On the other hand, it isn't necessarily going to be a river of cash for anyone who wants it. Along with the art of pitching to individual investors, one will also have to learn the art of pitching to the crowd -- and will be competing against everyone else doing the same thing. I expect to see a small industry of companies assisting founders in this new kind of marketing.

7Figures2Commas 13y ago
> Basically, this will be a huge amount of new competition for angel investors. It is unlikely to do any such thing. To argue this, you must believe that there exists a substantial number of accredited investors who are not actively investing in private companies because they haven't received random solicitations to do so. The reality is that accredited investors come in all shapes and sizes. The vast majority of the ones who are interested in putting their capital to work through investments in young private companies are already the people we call angel investors. In other words, lifting the ban on private solicitation is not likely to produce enough new angel investors to have a meaningful impact on competition for deals. > I expect to see a small industry of companies assisting founders in this new kind of marketing. There is already a well-established cottage industry of firms that help private companies raise money from accredited investors. Obviously, the firms that do this don't do so for free, and some of them demand finder's fees that no savvy founder would ever pay, but there's absolutely no reason to believe that companies unable to raise money on their own will pay less trying to market themselves to investors directly than paying a finder's fee.

7Figures2Commas 13y ago

> Basically, this will be a huge amount of new competition for angel investors. It is unlikely to do any such thing. To argue this, you must believe that there exists a substantial number of accredited investors who are not actively investing in private companies because they haven't received random solicitations to do so. The reality is that accredited investors come in all shapes and sizes. The vast majority of the ones who are interested in putting their capital to work through investments in young private companies are already the people we call angel investors. In other words, lifting the ban on private solicitation is not likely to produce enough new angel investors to have a meaningful impact on competition for deals. > I expect to see a small industry of companies assisting founders in this new kind of marketing. There is already a well-established cottage industry of firms that help private companies raise money from accredited investors. Obviously, the firms that do this don't do so for free, and some of them demand finder's fees that no savvy founder would ever pay, but there's absolutely no reason to believe that companies unable to raise money on their own will pay less trying to market themselves to investors directly than paying a finder's fee.