Comment by iheartmemcache | Hacker News Reader

Comment by iheartmemcache | Hacker News Reader

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Eh, it might be a good idea for the small population of tech savvy investors in Silicon Valley who make 6 figures and work within the industry so they can make informed decisions. But the whole SEC regulatory dictum that allows only accredited investors (accreditation based on annual income and net worth, not passing a Series 7 test or what not) can invest in certain forms of securities is a good thing.

Imagine if Joe Schmo reads an article on the home page of the tech section of "his Yahoo" about this new investment vehicle, decided to put all of his 401k money that as safely placed in low-load index funds into a YC fund that didn't particularly do so well when the fund finally matured and he cashed out. I've seen people pissed off at losing 10 bucks on Kickstarter prototypes-- imagine how pissed off Joe would be that he lost 200k because he wanted to "get in on this Web 3.0 stuff".

Those accredited investors regulations do more good than harm mostly because people in aggregate are greedy and don't read prospectus' in their entirety. Most people didn't even read their mortgages in 2007 (or now for that matter, even after the systemic ..situation of 2008), look what happened there.

If you're living in SF and married to someone in tech, odds are you make enough to qualify as an accredited investor anyways-- the per annum barrier is pretty low.

No it is not a good idea.

The whole "we're protecting you" argument is a line of garbage intended to sway meatheads into thinking that being denied access to ownership and prosperity is a good thing. That these these opportunities should only be given to already wealthy people and that the peons are too stupid to understand concepts like "this is pretty risky, you'll probably lose it all, but if it hits you might make a bundle."

In the meantime, the lobbyist for every other way to lose your shirt have made sure that all the doors are open to everyone. The poor little peons too stupid to understand if Facebook might have been a good risk are still able to: blow all their money in Vegas, invest in penny stocks, buy Apple at a top and sell at a bottom, buy a virtual spaceship for $10K, buy a house with maximum leverage into a bubbly market, have $100K in credit card and vehicle debt, and on and on. There are a million ways to shoot yourself in the foot and they are all perfectly fine, but if you want to put $1000 into Google pre-IPO then WHOA we gotta protect you from that!

I don't know what world you live in, but the accreditation barrier limits investors to the top 1-2% of the US. Very few people make $200K/yr single, $300K/yr married. Plus they changed the net worth provision to exclude home value. How many people do you think there are that have $1M net worth exclusive of their house?

> If you're living in SF and married to someone in tech, odds are you make enough to qualify as an accredited investor anyways-- the per annum barrier is pretty low.

I'm not, and I'm not. I recognize that not everyone is sophisticated enough to do well at startup investing, but it's no one's place to tell me that I should be legally forbidden from making my own financial decisions. And I deeply resent the patronizing attitude of anyone who supports that prohibition.

See Mt Gox for a good example of what happens.

Essentially how the first tech stock bubble played out

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