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Correct. That's why we have an established, well worn process for raising funding for your business. You raise from accredited investors by selling the highest-risk equity, then as you become more mature, you raise from bigger, less risk-tolerant entities. Eventually, you're in a position to publish financials regularly, and raise money from a broader audience ("go public"). Your itemized list is why we do it that way. This "tokenize everything" end run around the SEC is a just a way to bilk low-income individuals of their hard-earned savings.

The crypto community continues to speed-run the history of finance.




> The crypto community continues to speed-run the history of finance.

I think it is making it better than your classist dystopia.

In the same day: The US Treasury just talked about returning to a period of private currencies, but global this time, in response to proliferation of crypto assets being used as stores of value, currency and collateral. Central banks can still provide liquidity to the market. The unbanked have access to a global economy.

The US President gave an advertisement to bitcoin and Libra.

The SEC approved a digital Reg A+ offering, which is a rubric for all other ones.

US Congress members actively talking about the Token Taxonomy Act together to help all branches of the government adapt faster.


Yet letting Uber's bag holders dump their stock on the public was ethically correct? Don't pretend our current system of only letting the rich get richer by banning access to early-stage ventures is the best society can do.


All of the data necessary for anyone to make an informed purchasing decision about $UBER is available per SEC regulation. It's up to each individual to decide based on that whether or not it represents a good value, and to hit "buy" on their preferred trading platform, and at what price. Nobody was forced to buy $UBER, and nobody was lied to, and if they were, they've got plenty of recourse via the SEC. Everything of value was in the S-1 for months before the first trading day.

Nobody is banned from investing in early-stage businesses except by virtue of their level of risk tolerance, and some of us angel invest regularly. However, just opening up access to everyone doesn't change the fact that a legitimate, well-funded company with great traction and a great idea (the kind of equity you want) has no interest in selling to some random small-time individual with no experience to bring to bear. As a founder, in early stages, I'd want smart money. Just as nobody was required to purchase $UBER nobody is required to sell shares of their startup to small-time investors who have no idea what they're doing and provide no value. I predict if accreditation rules were removed, the same pool of smart money continues to get all the wins, but now dumb money holds all the bags.

Yes, it's possible to make bad investing decisions. That certainly doesn't mean ICOs are a good idea.


Thank you for describing our current system to me. I am advocating for a new system that lets people take more risk even if they are not wealthy. There is nothing magical that happens when you make $200k per year, if you make $199,999 per year you are not an idiot that needs the government to protect you from bad investments.


To be clear the system you're asking for exists, it was brought in by Obama as part of the JOBS act. Anyone can buy equity under the JOBS act and the company has far lower documentation requirements. The 'good' companies (in-demand equity) don't do it because they won't want to pollute their cap tables with 'dumb money' and the ones who are okay with that are terrible investments. It's adverse selection. [1]

Getting rich isn't easy and opening up unregulated access to crap securities isn't going to change that.

[1] https://www.finra.org/investors/alerts/crowdfunding-and-jobs...


To be clear, the moment one is accredited they can make all the dumb investment decisions they would like. However, beneath a magical line of $200k per year salary the government prevents you by legal force from doing so. When you make above that number you are free to be dumb. I'm advocating letting everyone make their own decisions, for better or worse.


You seem to have ignored the key points.

(1) A program that meets that vast majority of your requirements exists and exhibits terrible adverse selection issues, so you propose... expanding it? In the hopes it gets... better? Any thoughts on why that would happen?

(2) The $200K salary line is "magical" but does represent middle-class in 100% of communities in the United States. IMO it should have been indexed to inflation ($3-4M in annual income inflation adjusted), bringing it quite a bit higher. You can also qualify on the basis of $1M in assets excluding your principal residence. This provides adequate buffer in the event your investments fail outright, which the vast majority of early stage investments do. It's the same reason a 20.9 year old can't buy beer. You draw the line somewhere, for better or for worse.

(3) To the best of my knowledge there are no legal repercussions for you for investing as a non-accredited investor, though there may be for the company for failing to follow proper procedure.

(4) These laws weren't brought in because too many poor were getting rich too fast and there wasn't enough room for all the yachts in Boston Harbor. It was due to large-scale speculation literally causing the great depression [1].

(5) Remind me who pays for the welfare programs when people who aren't in a place to take financial risks, the most desperate usually, are pushed into insolvency? Taxpayers. That's why taxpayers also get a say in who can invest.

(6) Your argument reads a lot like the people who want to kill off the EPA because the rivers haven't caught fire in a while. There's a reason they don't catch fire.

[1] https://www.investopedia.com/terms/n/nonaccreditedinvestor.a...


It's a philosophical disagreement - I don't want the government picking who can and can't invest their own money into what investments. Many developed countries, such as Switzerland, have no such laws and the world isn't crashing down for them.


Which developed nations are you referring to exactly? Australia, Brazil, Canada, the entire EU, Israel, New Zealand, Singapore and the US all have accredited investor rules. The US is among the least strict. [0] It seems like Switzerland has a similar model [1, 2]:

(1) According to Art. 10 Para. 3 of the Swiss Federal Collective Investment Schemes Act (CISA), qualified investors are considered:

(e) High net worth individuals

(3) A high net worth individual is someone who can confirm in writing that they directly or indirectly have net financial investments of at least 2 million Swiss francs.

Either way, you've again side-stepped every salient point. It's fine to have a philosophical disagreement but we should be able to discuss the facts at hand. Philosophically I don't think the government should be able to tell people what they can and can't dump into the rivers because it's in their interests only to drop safe stuff in there. Reality, however, indicates that in fact that's an awful idea and we shouldn't let them.

Sadly, facts get in the way of philosophy. That's why we have regulations.

Either way you fall prey to the classic libertarian fallacy, that an individual doesn't affect the society around them in any way. Yeah you go broke investing in the South Seas 2.0 company, or BTC at $19K. Cool. You own and sell property at a loss, now you affect your neighbors property values. Now you're on welfare, and on medicaid, and now all of society has to pay for your poor investing decisions. The law is how society mitigates this risk.

[0] https://en.wikipedia.org/wiki/Accredited_investor

[1] https://www.swissfunddata.ch/sfdpub/en/group/info

[2] https://www.lexology.com/library/detail.aspx?g=a8e19e48-a4d0...


> Don't pretend our current system of only letting the rich get richer by banning access to early-stage ventures is the best society can do.

It's not, but that's not the point. Offering unfettered access to investing with zero regulation is exactly how more of the Bernie Madoff's of the world would exist. You think the rich are getting richer under the current system now? Just imagine the number of grifter's that would get richer by swindling large swathes of common folk.


> Yet letting Uber's bag holders dump their stock on the public was ethically correct?

No one dumped their stock on the public. They offered to sell it and someone offered to purchase it.

(Granted, "the public" has some ownership because it likely ended up in several funds that people are invested in).

But on an individual transaction level, someone sought to buy it at a price and someone else sought to sell it at that price. What's the problem with that transaction?

That's how every IPO, and to a greater extent - "the market," works.


I'm not the biggest Uber fan, but you could say that about any IPO. Uber at the time was (and is) a going concern with an actual product, not a random token/coin.


They are only able to dump their stock if someone is willing to buy it.


I ain't buying your bags VCs


I guess you'd be unhappy with Square's returns (IPO at $9.00 three years ago, currently trading at $82.28, for an annualized 100% gain)? Take that, VCs.




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