>You can go to vegas and blow $100,000 in a weekend, but you think it's too dangerous to let people put that in 10 seed stage startups? Because they might lose the money?
Casinos are highly regulated so I am not sure this is a good example.
I actually don't think it is dangerous because people will lose money, I think it is dangerous because scammers would have a major advantage over non-scammers in a deregulated start-up investment market. Like Gresham's Law [1] we would soon be left with a market totally dominated by scammers and all trust would soon be lost in start-ups (i.e 1920s). This was why the regulations in this area were brought in - to restore the trust of the public in the stock market.
Casinos are highly regulated so I am not sure this is a good example.
I actually don't think it is dangerous because people will lose money, I think it is dangerous because scammers would have a major advantage over non-scammers in a deregulated start-up investment market. Like Gresham's Law [1] we would soon be left with a market totally dominated by scammers and all trust would soon be lost in start-ups (i.e 1920s). This was why the regulations in this area were brought in - to restore the trust of the public in the stock market.
1. http://en.wikipedia.org/wiki/Gresham's_law