While your description certainly can conjure some bad memories, risk pooling per se is a utility-creating activity, and only breaks down when correlations are n

While your description certainly can conjure some bad memories, risk pooling per se is a utility-creating activity, and only breaks down when correlations are not estimated correctly. Unregulated markets also aren't necessarily a bad thing, but they do require greater sophistication and caution on the part of investors, due to the greater probability of fraud and promotion. It's important that the angels are sufficiently aligned by having skin in the game and that the method of calculating the carry does not somehow create a principal-agent problem. I am not familiar enough with the product to know if that is the case.