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Comment by alain94040 | Hacker News Reader

Think outside the box: invest $5K in 7 startups. How you pick the 7 is of course the tricky part, but much less work than actually being the one coding, designing and selling stuff.

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The other tricky part is that any startup with more than a few brain cells won't take investment from someone who isn't an accredited investor. If the original poster isn't a millionaire (outside of real estate), then it becomes pretty awkward to invest.

http://en.wikipedia.org/wiki/Accredited_investor

Yea so that option is out.

I've kind of been wondering if it would be possible to have some sort of mini-stock exchange for startup companies. Like the Toronto Venture Exchange, but specifically for startup tech companies.

Just completely eliminate the VC/angel seed system, and replace it with a democratized, electronic, exchange.

It should be possible, but the US government would limit it to accredited investors, and there are already a lot of firms catering to them.

That was one of our goals when we started fairsoftware (now foundrs.com), but US regulations prevented us from going all the way. I think we were pretty good at bypassing a lot of SEC regulations (we invented a concept of "virtual shares"), but cash for shares was off-limits. And we had some pretty good lawyers to help us out.

http://www.secondmarket.com/

regulated like crazy. you can't promote the sale of a stock without it being publicly traded. secondmarket gets around this by first being regulated and second being a matching service and not an open market.

Good one. It's definitely less work, but you also have less say in the possible success rate, right?

Less say but if you think about it, are the chances higher that 1 of say 7 startups will succeed (when you have the choice of being highly selective when choosing them) or that 1 of your 2 - 3 starts with succeed to the point of bringing in 5000 a month?

I think at this point it makes more sense.

Let's say one in three succeeds. Then 1 of mine will succeed, and 2 of the 6 investments. But mine are owned by me, the investments are only owned in a small part by me. Still sounds like a better idea to create my own.

I think the assumption is that your startup is controlled by you, but other startups are potentially controlled by people prone to failure. The odds for your own startup -should- be better than others.

Of course, if you're prone to failure, the reverse is true... But if you know you're prone to failure, why would you try something as risky as a startup in the first place?

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