

How can an ordinary person invest in startups? - Pbyte


======
feydr
This question comes up a lot and frankly I think it's a _really_ bad idea.

I'm a big proponent of the JOBs act but for different reasons.

Let's assume you have 10-15k that you want to throw at a startup. Let's also
assume that being an 'investor' you have maxed out your tax accounts (IRAs,
HSAs, etc.) and you have a year's supply of rent/mortgage, food, electricity,
etc.

So you have 10-15k that you can just blow immediately and not worry about ever
seeing it again. What do you do? Buy 5% of a startup?

Unless you are actively involved with the startup your chances of ever seeing
that cash again are practically none.

Also, through the sheer fact that a startup allowed you to invest in them
being that you have nothing else to give them but money (I'm guessing here)
shows you that they are not being serious about it and that money is going to
go up in flames.

You'd be better off going anywhere but places like California and buying a
house with 20% down.

Why? You get immediate returns by placing it under property management.

If not property buy shipping containers. If not those, go buy oil royalties
from producing wells. If not those, throw it into something like
betterment.com or lendingclub.com.

All of these investments will give you a yield that, while not guaranteed, is
better than the craps roll you are placing into a 'startup'.

Now, I know you didn't want to read that so I'll give you the answer you are
looking for.

Even without the JOBs act not being in place, you as an un-accredited investor
(which I assume you are being 'ordinary') can invest in a startup as long as
they are raising no more than 1M for the first year and you aren't going to be
un-lucky #36 of the guys that bought shares with them.

If you really know these guys (and you should if you are wanting to throw your
money in the paper shredder) they could organize a SCOR offering as well.

------
bcater
Start one. Ordinary people do it all the time.

------
damoncali
People of ordinary means should not invest in startups because it is
financially insane to do so without some sort of diversification. If you can
afford to diversify, you are not "ordinary", economically speaking.

------
ddorian43
you can when the jobs act passes, i saw there was a startup like kickstarter
that will open soon starting with 3 companies to enable anyone to buy shares
in to them but i dont remember the name. If you find it please reply.

