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I think there's something here. I run a VC-backed company, and though we did that for a specific reason and have no regrets, I still feel like the world hasn't

I think there's something here. I run a VC-backed company, and though we did that for a specific reason and have no regrets, I still feel like the world hasn't truly seen companies like Mailchimp, Campaign Monitor, GitHub, etc. (before those that raised, raised). The VC world does tend to dismiss these types of companies, which I now realize is simply out of frustration at the lack of investable opportunity in these high-margin, growing, and sustainable companies. I think we haven't given enough weight to the idea that what those companies have done is revolutionary, and is actually a lot more contrarian than the existing startup model.

datashovel 11y ago
I think a huge part of it is regulations. Imagine all the successful kickstarter projects that have ever existed. Then imagine a world where, if each of those people who "purchased" from these projects actually owned a percentage of that ongoing success? I think, of the many points of attack in leveling the playing field, removing regulations that prevent small-time "investors" from owning equity in ventures is a candidate that's high on my list. Although in a way that passes the buck (ie. you're still dependent on investors and giving away equity). I am looking forward to seeing how crowd-sourced loans and such will work. For example imagine a prosper.com at scale (catered specifically toward small business loans). And wouldn't it be nice if regulations didn't prevent a small startup from creating such a crowd-sourced loan program? How about a crowd-funded VC platform? I imagine alot of things are in the works that will help reduce the importance of the middle-man (ie. the investor). I look forward to seeing how that all comes together. But none of it will get off the ground until regulations are no longer the barrier to entry.
- rorykoehler 11y ago
  These things already exist. Check out Seedrs for example
- danieltillett 11y ago
  There is a reason for all these regulations. While I am generally pro- deregulation, letting unsophisticated investor put money in start-ups is highly dangerous. While it would make it easier for genuine companies to raise money, the problem is it makes it much easier for scammers.
  - datashovel 11y ago
    I think this used to be the case. But think about what the internet has done for "reputation" tracking. I think deregulation would open the "potential" for scammers, but at the same time would open a market for websites like a "Yelp for investors".
    - danieltillett 11y ago
      Given how much reputation "massaging" occurs on Yelp I am not sure this is a good model :) The solution to preventing scamming is to make it harder for scammers to raise money than genuine businesses. The major difficulty is it is very difficult for unsophisticated investors (actually all investors) to make accurate judgments into the character of founders of start-ups. Even if we had a good reputational system for start-up founders (we don't), most founders (especially the most innovative ones) are not going to have a lot of history to support any such reputation system. On the topic of reputation, Linkin^ has a good platform to monetrise this demand. They could charge users (and pay other users) for reputation endorsement (not just skill endorsement). They could have users provide an enormous amount of biographical detail and then have others verify (or not verify) this data. Make enough links and it will be very hard for a scammer to succeed over the honest. ^ Actually this could be a great idea for a start-up. Have people upload massive amounts of biographical data and then pay other people to endorse each data point - probably someone is doing it already and will soon tell me all about it :)
      - datashovel 11y ago
        I agree reputation isn't an easy problem to solve. I think taken to its logical limit something like what you've described above is likely close to if not the correct solution. Using the tried and true methods that already exist in the public key infrastructure of the web, I think the problem of tracking reputation online (in a reliable way) is something that will be solved in our lifetimes.
        danieltillett 11y ago
        The real interesting question here is how many data points do you need to confirm to establish that someone is trustworthy?
- cfield 11y ago
  This is one potential outcome of AngelList syndicates[0], which is I think one reason they have been vocal[1] about the SEC's implementing regulations of the securities reforms (including crowd-funding) that Congress called for in the 2012 JOBS Act. [0] https://angel.co/help/syndicates https://angel.co/help/syndicates [1] https://www.sec.gov/comments/s7-06-13/s70613-37.pdf https://www.sec.gov/comments/s7-06-13/s70613-37.pdf

datashovel 11y ago

I think a huge part of it is regulations. Imagine all the successful kickstarter projects that have ever existed. Then imagine a world where, if each of those people who "purchased" from these projects actually owned a percentage of that ongoing success? I think, of the many points of attack in leveling the playing field, removing regulations that prevent small-time "investors" from owning equity in ventures is a candidate that's high on my list. Although in a way that passes the buck (ie. you're still dependent on investors and giving away equity). I am looking forward to seeing how crowd-sourced loans and such will work. For example imagine a prosper.com at scale (catered specifically toward small business loans). And wouldn't it be nice if regulations didn't prevent a small startup from creating such a crowd-sourced loan program? How about a crowd-funded VC platform? I imagine alot of things are in the works that will help reduce the importance of the middle-man (ie. the investor). I look forward to seeing how that all comes together. But none of it will get off the ground until regulations are no longer the barrier to entry.

rorykoehler 11y ago
These things already exist. Check out Seedrs for example
danieltillett 11y ago
There is a reason for all these regulations. While I am generally pro- deregulation, letting unsophisticated investor put money in start-ups is highly dangerous. While it would make it easier for genuine companies to raise money, the problem is it makes it much easier for scammers.
- datashovel 11y ago
  I think this used to be the case. But think about what the internet has done for "reputation" tracking. I think deregulation would open the "potential" for scammers, but at the same time would open a market for websites like a "Yelp for investors".
  - danieltillett 11y ago
    Given how much reputation "massaging" occurs on Yelp I am not sure this is a good model :) The solution to preventing scamming is to make it harder for scammers to raise money than genuine businesses. The major difficulty is it is very difficult for unsophisticated investors (actually all investors) to make accurate judgments into the character of founders of start-ups. Even if we had a good reputational system for start-up founders (we don't), most founders (especially the most innovative ones) are not going to have a lot of history to support any such reputation system. On the topic of reputation, Linkin^ has a good platform to monetrise this demand. They could charge users (and pay other users) for reputation endorsement (not just skill endorsement). They could have users provide an enormous amount of biographical detail and then have others verify (or not verify) this data. Make enough links and it will be very hard for a scammer to succeed over the honest. ^ Actually this could be a great idea for a start-up. Have people upload massive amounts of biographical data and then pay other people to endorse each data point - probably someone is doing it already and will soon tell me all about it :)
    - datashovel 11y ago
      I agree reputation isn't an easy problem to solve. I think taken to its logical limit something like what you've described above is likely close to if not the correct solution. Using the tried and true methods that already exist in the public key infrastructure of the web, I think the problem of tracking reputation online (in a reliable way) is something that will be solved in our lifetimes.
      - danieltillett 11y ago
        The real interesting question here is how many data points do you need to confirm to establish that someone is trustworthy?
cfield 11y ago
This is one potential outcome of AngelList syndicates[0], which is I think one reason they have been vocal[1] about the SEC's implementing regulations of the securities reforms (including crowd-funding) that Congress called for in the 2012 JOBS Act. [0] https://angel.co/help/syndicates https://angel.co/help/syndicates [1] https://www.sec.gov/comments/s7-06-13/s70613-37.pdf https://www.sec.gov/comments/s7-06-13/s70613-37.pdf