

How My Startup Went IPO And Skipped VC Funding (Fiction) - alain94040
http://blog.fairsoftware.net/2010/06/23/how-my-startup-went-ipo-and-skipped-vc-funding-a-story/

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brlewis
If (A Story) was intended to disclose that this is a fictional story, it
didn't work for me. A story isn't always fiction.

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alain94040
Maybe it's just me, but I enjoy titles where the entire meaning is only fully
understood after you have read the book/article.

Think of it as a puzzle maybe? Not everything is what it seems, but there are
clues out there :-)

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jasonlbaptiste
I've wondered this in some ways too, but then I'm curious whether it makes
sense in the long run. Normal people can't understand the risks associated
with investing in startups, even if it might be very small amounts of stock
purchases. The risks are significantly higher if they only invest in ~5
companies, which many might do. From what I've read, angel investing starts to
even out when you hit upwards of 20 companies. You would also have to start
dealing with intense regulation. < sarbox+being a normal public company, but
something way more than a traditional reg d filing. One alternative MIGHT be:
Start a small angel fund where people can get in with a small buy in (500?
1,000?). Then you'd have 500 investors and I don't know if you can legally do
that. (Saying that in the I have absolutely no f'ing clue sense).

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alain94040
True that the general public would be clueless. But on the other hand, in
Silicon Valley there is a market of educated, startup-aware entrepreneurs,
who'd love nothing more than play the startup stock market.

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jasonlbaptiste
VERY very good point. Do you keep it invite only then? I'd certainly buy in.
Then again, why not just make it an invite only fund where the buy in is a
monthly commitment of $500-$1000. 100 entrepreneurs at 1k a month, is 1.2
million. Invest that at 25k across 40 deals (leaving 200k left over as a
reserve for legal,etc. though it may not be that high using standard docs).

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alain94040
If it's just one fund, there's one guy who decides what to buy. It's not a
market. If you have $50K, you can contact any number of real VCs and give them
your cash. You thus become a member of the prestigious LP club and are allowed
to complain about the dismal returns.

I think the fun part is being able to individually look at the startups listed
and buy whenever you see something you like. It makes you feel good (you are
helping a good idea take off), and you may make a lot of money from it (or
lose it all).

I was at TechCrunch50 last year and discussed this idea with some people, and
I got pushback from pros. Their argument: if you are a good startup, you can
raise money the "normal way". So such a market would only attract losers...
Not good of a reputation to have for a stock market.

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NEPatriot
In order to buy shares in a private company you must be an "accredited
investor" (make over 200/k for 2 years or 1M in net worth). In order to sell
shares to the public I think you need permission from the SEC. And once the
SEC gets involved it gets messy.

