Kickstarer. SeedInvest. GoFundMe.
Let’s ask ourselves why crowdsourcing exists.
Answer: Because of regulations against normal people raising capital to bring new products to market is restricted if you simply want to see shares of your new enterprise; you need high net worth individuals to invest privately.
As demonstrated by Bain Capital’s retirement accounts, private equity can be extremely valuable; restricting this to already-high net worth individuals inherently concentrates wealth further. If we allowed normal individuals to invest in private enterprises, some of that wealth could be spread around.
The argument that high net worth rules exist to protect investors is absolute bullshit. Having a high net worth says absolutely nothing about your ability to choose future investments and not be defrauded. Speaking of fraud, which is presumably what these private investment regulations tries to prevent, we already have laws making fraud illegal. There is no sense in restricting investment further when fraud protection already exists in the form of other laws.
Let’s remove the hindrance to commerce that Reg. D and allow any individual to own private shares of a company. General solicitation should be allowed to firms of all size. Some people will lose money, some people will make out fantastically. Worried about fraud so much? Stick to publicly-traded companies and traditional investments, but do not make that choice for me.
Considering how FUBAR the publicly traded markets are at this point, I’d like to see normal investors like myself be given the option to choose how to invest in smaller, local enterprises.