4 ms·
This isn't Joe Random they're selling to, they're selling to institutional investors who are sophisticated buyers. There are plenty of people who fully underst
by ig1 13y ago
This isn't Joe Random they're selling to, they're selling to institutional investors who are sophisticated buyers.
There are plenty of people who fully understand the risks involved who want to engage in high-risk high-return investment (especially ones where the risk profile is significantly different from their other investments to provide hedging).
There are risks with this model (for example there may be less due diligence then you traditionally get with VCs) but the overall risk model probably isn't hugely different from a seed stage fund.
- primitivesuave 13y agoRight, I was referring to the claim that some day you can invest money in angel investors through a stock exchange.
- rayshan 13y agoInstitutional investors who could be pension funds or middlemen who repackage this new class of asset to sell to individuals for convenience. Not writing off the utility of such an instrument but multiple levels of complexity could be dangerous.
- IBM 13y agoJoe Random wasn't buying Wall Street's CDOs either.