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> The old dotcom bubble was driven by IPO money from unsophisticated investors Curious how the advent of companies like WeFund et al. will change this. As muc

> The old dotcom bubble was driven by IPO money from unsophisticated investors Curious how the advent of companies like WeFund et al. will change this. As much as people like the "feel-good" aspect of the common man being able to invest in start-ups, I'm interested in seeing how this turns out. It's been said a thousand times, but for every Facebook / Google startup there are many, many more that crash & burn that simply don't make headlines.

ericd 13y ago
Yeah, I'm pretty worried about what's going to happen there. I don't think that normal people have any sense of the level of risk involved, and it's probably a matter of time before companies start driving hard to get investment money from unsophisticated investors by highlighting the few massive successes. I'm very happy to have the chance to invest in startups, I'm just not sure it's a good thing overall.
beat 13y ago
When I saw WeFund, I thought "Kickstarter for penny stocks!" Ugh. If this is being done in a way that hordes of non-qualified investors are actually getting stock, it could well handicap any startups that go that route, because the professional investors they'll need in later, bigger rounds will consider them toxic. Consider what this does to the cycle... startups good enough to get real angel money will probably be wise enough to not take on a bunch of high-risk unqualified capital, and so they won't be on WeFund at all. This leaves WeFund to the ones that are more idea than startup, not good enough to get in the real capital game. So the likelihood of hits is very low. So, how much money can be poured into the system this way? Not enough to distort the entire market the way the dotcom boom did, I think. It would take a million thousand-dollar investors to just get a billion, which isn't enough to really kill anything - and $100M or less even less important in the big scheme of things.
prostoalex 13y ago
There will be pressure on them to perform and show some quality exits. Retail investors are a finicky bunch and generally do not expect their capital to be locked up for 5+ years even if repeatedly told so.

ericd 13y ago

Yeah, I'm pretty worried about what's going to happen there. I don't think that normal people have any sense of the level of risk involved, and it's probably a matter of time before companies start driving hard to get investment money from unsophisticated investors by highlighting the few massive successes. I'm very happy to have the chance to invest in startups, I'm just not sure it's a good thing overall.

beat 13y ago

When I saw WeFund, I thought "Kickstarter for penny stocks!" Ugh. If this is being done in a way that hordes of non-qualified investors are actually getting stock, it could well handicap any startups that go that route, because the professional investors they'll need in later, bigger rounds will consider them toxic. Consider what this does to the cycle... startups good enough to get real angel money will probably be wise enough to not take on a bunch of high-risk unqualified capital, and so they won't be on WeFund at all. This leaves WeFund to the ones that are more idea than startup, not good enough to get in the real capital game. So the likelihood of hits is very low. So, how much money can be poured into the system this way? Not enough to distort the entire market the way the dotcom boom did, I think. It would take a million thousand-dollar investors to just get a billion, which isn't enough to really kill anything - and $100M or less even less important in the big scheme of things.

prostoalex 13y ago

There will be pressure on them to perform and show some quality exits. Retail investors are a finicky bunch and generally do not expect their capital to be locked up for 5+ years even if repeatedly told so.