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Why punish entrepreneurs who want to start a company because of a few bad apples? Anyone who invests in anything needs to do their research, understand the risk

Why punish entrepreneurs who want to start a company because of a few bad apples? Anyone who invests in anything needs to do their research, understand the risks and make the right choice for themselves.

bhayden 12y ago
You could make that argument about anything. People who use credit cards need to do their research and understand the 200 page card agreement, so we shouldn't punish lenders by having consumer protection laws. Startups are exactly this same sort of risk, except it's even worse - there aren't even terms and agreements saying exactly what's being received in return for money. There's no way crowd funded equity owners are going to get access to due diligence that would make it a responsible investment. And there's no way way, ever, that a startup makes sense from a responsible investing perspective to a random Joe off the street. It's essentially a lottery ticket because there's no way to accurately assess the value and risk of what they're investing in, and even if there was any sane financial planner will tell you it's a bad investment for regular people.
- leesalminen 12y ago
  Outright deception is wrong and consumer protection laws are in place for good reason. To remove that option completely for the 99% of a society is ridiculous and harms innovation, entrepreneurs, and the notion of having a "free" market. As a small business owner in Colorado, I've had several friends, family, co-workers, potential customers, etc... offer to invest small amounts in my company ($500 - $5000). I've had to turn them away because of government intervention. I wouldn't have accepted money from everyone that offered but don't think that the government should remove that option from the table.
vskarine 12y ago
You are making huge assumption that people know how to do their own research and think with reason rather than emotions. If that was indeed true then there would be no casinos, lotteries, credit card debt, MLM schemes, mortgage defaults, etc not that these don't add value to the economy but average person is probably better off without them
- leesalminen 12y ago
  Why should a government decide what is appropriate for you and what isn't?

bhayden 12y ago

You could make that argument about anything. People who use credit cards need to do their research and understand the 200 page card agreement, so we shouldn't punish lenders by having consumer protection laws. Startups are exactly this same sort of risk, except it's even worse - there aren't even terms and agreements saying exactly what's being received in return for money. There's no way crowd funded equity owners are going to get access to due diligence that would make it a responsible investment. And there's no way way, ever, that a startup makes sense from a responsible investing perspective to a random Joe off the street. It's essentially a lottery ticket because there's no way to accurately assess the value and risk of what they're investing in, and even if there was any sane financial planner will tell you it's a bad investment for regular people.

leesalminen 12y ago
Outright deception is wrong and consumer protection laws are in place for good reason. To remove that option completely for the 99% of a society is ridiculous and harms innovation, entrepreneurs, and the notion of having a "free" market. As a small business owner in Colorado, I've had several friends, family, co-workers, potential customers, etc... offer to invest small amounts in my company ($500 - $5000). I've had to turn them away because of government intervention. I wouldn't have accepted money from everyone that offered but don't think that the government should remove that option from the table.

vskarine 12y ago

You are making huge assumption that people know how to do their own research and think with reason rather than emotions. If that was indeed true then there would be no casinos, lotteries, credit card debt, MLM schemes, mortgage defaults, etc not that these don't add value to the economy but average person is probably better off without them

leesalminen 12y ago
Why should a government decide what is appropriate for you and what isn't?