3 ms·

Ah it's good to see that the colossal mistake of historic proportions (http://baselinescenario.com/2012/03/19/a-colossal-mistake-of-historic-proportions-the-job

Ah it's good to see that the colossal mistake of historic proportions (http://baselinescenario.com/2012/03/19/a-colossal-mistake-of-historic-proportions-the-jobs-bill/ http://baselinescenario.com/2012/03/19/a-colossal-mistake-of...) Just Open Bucket Shops (JOBS - http://www.nytimes.com/2012/03/15/opinion/collins-the-senate-overachieves.html?_r=0 http://www.nytimes.com/2012/03/15/opinion/collins-the-senate...) act is in full swing and that the exploiters of it are already out there having at it with gusto. I'd like to propose a toast to the forthcoming increase in financial fraud, cost of capital and stupidity. Can I get a hip-hip-hooray for a reduction in investor protection? More seriously, this entire situation feels eerily similar to the repeal of Glass-Steagall protections with GLBA back in 1999 (https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act). The negative effects will take a decade or so to be felt, but felt they will be. It's probably hard for people to see it now, but this really is dodgy as hell. Here's to another bubble.

rattray 13y ago
Care to elaborate? Your comments are quite negative without a lot of backing/substance. Though you may have done a fair amount of research, it doesn't appear here -- I'm not sure this is the kind of critique hn should be about.
7Figures2Commas 13y ago
The article, and your comment, suggests that this move is strongly connected to general solicitation, but I think the connection implied does not exist. In this context, Regulation D applies to the companies raising money through a private offering. Companies that want to avail themselves of general solicitation will need to take additional steps to be in compliance with the law. This includes filing a Form D 15 days prior to the first use of general solicitation and ensuring that written solicitation contains certain information and disclaimers. If you're insinuating that private individuals are going to rush to refer to companies to FundersClub and then publicly solicit investments in those companies (i.e. through email blasts, advertisements, blog posts, etc.) in the hopes that they'll one day get a piece of FundersClub's carried interest (if there ever is any) as a result of the JOBS Act, you're going too far. That is not what the revisions to Regulation D are about and anybody who has that in mind would probably be well-advised to speak with an attorney.
- mittal 13y ago
  Confirmed that FundersClub Refer is not connected to general solicitation or the JOBS Act. We are simply rewarding members (accredited investors) who are referring us companies that end up making it past our vetting and due diligence processes and becoming portfolio companies.
  - confluence 13y ago
    > we are intrigued by the new possibilities enabled by the JOBS Act and look forward to potentially expanding our activities down the road. -- https://fundersclub.com/site/faq/ https://fundersclub.com/site/faq/ Refer looks like the beginning of a kickback scheme a la Morgan Stanley stock tech analysts circa 1994. Furthermore, it is true that you are only targeting "accredited investors" for now. Two things should be noted. Firstly, accredited investors aren't necessarily smart investors. Earning $200K a year or having a networth of $1 million is a fairly common thing and is unconnected to financial literacy and startup valuation (see actors/doctors/lawyers/baby boomers investing in startups). Secondly, are you honestly telling me that you are just going to stick with soliciting accredited investors if the legal obligations you are presently under were to be lifted? Please. A side point. A lot of people think that making startups an investment option for all is a good thing. I'm fairly certain that's a stupid idea, for the simple fact that if VCs, whose full time job it is to solely invest in startups, suck at investing in startups, what chance do normal investors with other jobs have exactly? A lot of people thought that online trading was an amazingly good idea during the late 90s (it sure was for eTrade), but the individual returns of sole traders illustrate that this was not the case, and in fact most investors would've been better off holding a diversified low-fee index fund. Not all "disruption" is good disruption. To the downvoters, may your ignorance go forth and multiply.

rattray 13y ago

Care to elaborate? Your comments are quite negative without a lot of backing/substance. Though you may have done a fair amount of research, it doesn't appear here -- I'm not sure this is the kind of critique hn should be about.

7Figures2Commas 13y ago

The article, and your comment, suggests that this move is strongly connected to general solicitation, but I think the connection implied does not exist. In this context, Regulation D applies to the companies raising money through a private offering. Companies that want to avail themselves of general solicitation will need to take additional steps to be in compliance with the law. This includes filing a Form D 15 days prior to the first use of general solicitation and ensuring that written solicitation contains certain information and disclaimers. If you're insinuating that private individuals are going to rush to refer to companies to FundersClub and then publicly solicit investments in those companies (i.e. through email blasts, advertisements, blog posts, etc.) in the hopes that they'll one day get a piece of FundersClub's carried interest (if there ever is any) as a result of the JOBS Act, you're going too far. That is not what the revisions to Regulation D are about and anybody who has that in mind would probably be well-advised to speak with an attorney.

mittal 13y ago
Confirmed that FundersClub Refer is not connected to general solicitation or the JOBS Act. We are simply rewarding members (accredited investors) who are referring us companies that end up making it past our vetting and due diligence processes and becoming portfolio companies.
- confluence 13y ago
  > we are intrigued by the new possibilities enabled by the JOBS Act and look forward to potentially expanding our activities down the road. -- https://fundersclub.com/site/faq/ https://fundersclub.com/site/faq/ Refer looks like the beginning of a kickback scheme a la Morgan Stanley stock tech analysts circa 1994. Furthermore, it is true that you are only targeting "accredited investors" for now. Two things should be noted. Firstly, accredited investors aren't necessarily smart investors. Earning $200K a year or having a networth of $1 million is a fairly common thing and is unconnected to financial literacy and startup valuation (see actors/doctors/lawyers/baby boomers investing in startups). Secondly, are you honestly telling me that you are just going to stick with soliciting accredited investors if the legal obligations you are presently under were to be lifted? Please. A side point. A lot of people think that making startups an investment option for all is a good thing. I'm fairly certain that's a stupid idea, for the simple fact that if VCs, whose full time job it is to solely invest in startups, suck at investing in startups, what chance do normal investors with other jobs have exactly? A lot of people thought that online trading was an amazingly good idea during the late 90s (it sure was for eTrade), but the individual returns of sole traders illustrate that this was not the case, and in fact most investors would've been better off holding a diversified low-fee index fund. Not all "disruption" is good disruption. To the downvoters, may your ignorance go forth and multiply.