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I recognize that this isn't a pyramid scheme, but it does look a lot like a multi-level marketing structure. MLMs can be viable, real businesses, but this may
by wtvanhest 13y ago
I recognize that this isn't a pyramid scheme, but it does look a lot like a multi-level marketing structure.
MLMs can be viable, real businesses, but this may open the opportunity for abuse. I'm very interested to see how the SEC handles this.
I understand the founders want rapid growth, but accredited investors can make mistakes, and big ones. They are not professional investors, just accredited.
- EScott11 13y agoGood points, but the folks at Funders Club are professional investors. The referrers only get a kickback when FundersClub chooses to invest, and FundersClub will only do so if they think the company will be sufficiently successful. A standard which is likely higher than an unprofessional accredited investor's.
- wtvanhest 13y agoESott, Thanks, I completely misread the article. I thought it was suggesting that FoundersClub would pay an investor who brings in another investor. I didn't understand that FoundersClub would pay an investor who brings in a company.