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people should know what they are getting in to. if they don't, just like the normal market, that's their problem. it would be very nice to destroy the vc market

by x5n1 11y ago

people should know what they are getting in to. if they don't, just like the normal market, that's their problem. it would be very nice to destroy the vc market, or at least give them some more competition, and also to see some of the wealth generated returned to the people rather than back in the pocket of people who already have lots of money.

tptacek 11y ago
Venture capital funds tend to underperform the market, and are subsidized by allocation requirements at their customers (pension funds, university endowments) that encourage relatively small slices of huge funds to be put into longshots and stuff that isn't correlated with lucrative investments. At least, that's what Kauffman said about it. To generate outsized returns for a small subset of investors, you don't have to be anywhere nearly as sophisticated as a VC fund: you can just run a lottery. If you want to do something more socially useful than a numbers racket, crowd-investing probably isn't the best way to go.
- x5n1 11y ago
  You are probably right, I am probably selling the dream when the reality is that by and large this sort of thing becomes a lottery than any sort of actual investment.
- pbreit 11y ago
  Good ventures firms, which are simple to identify, way outpeform the market.
pmorici 11y ago
It's a lot easier to outright lie and get away with it when you have a lot of people contributing a small amount of money. Even if someone gets proof you defrauded everyone no single party has the leverage to stand up for themselves.