Hacker News Reader

Comment by charlie0 | Hacker News Reader

Don't worry, you'll get a chance to buy in once all the private investors have made their killing.

"all the private investors"

AFAIK there is still some limit before the company is treated like a public one from various legal perspectives. Something like "no more than 2000 private investors"?

Given that there are probably over a million qualified investors in the US alone, that is just a very small fraction of those.

Accredited vs non-accredited is meaningless in the grand scheme of things. There are millions of accredited investors in this country would would love to invest in SpaceX (and OpenAI and the rest) if given the chance. Heck I bet most people reading this are accredited even if they don't know it ($200K annual salary isn't all that crazy in tech even at the entry level). The real barrier is always convincing someone to let you invest in their venture. And why on earth would they? What exactly does your dollar bring into the picture that they don't otherwise have already?

I‘ve read a lot of books about Buffett‘s strategy and the goal is to find as many investment opportunities as possible and then invest in the one which most likely has the best returns. For this strategy, it doesn’t matter so much whether there are many privately funded companies. There are tens of thousands of public market stocks, many of which are overlooked. Or, put differently, it doesn’t matter if a company is producing state-of-the-art technology or, say, building houses. If the price doubles in two years, then you‘ve made money.

Thank you SEC.

And in case people don’t know, this is referring to an accredited investor which is a government enforced way for the rich to get richer.

Well they try to justify it by saying that we unwashed masses don't have enough savvy to be investing.

Have you browsed through the Wall St Bets subreddit? Not that pre-IPO investing is any more reckless than throwing away money on naked options, but it gives a good sense for the savviness of the average investor.

The unwashed masses don’t have enough savvy. They’re gambling on crypto coins and 0DTEs. Or they’re dumping their life savings into crypto “earn” products where the yield is from a ponzi and they’re surprised when the whole thing vaporizes.

One thing ChatGPT taught me, is that it can reason and argue better than me about basically everything I'm not already an expert in.

If you don't trust ChatGPT to make investments, you shouldn't trust the masses (including me) either.

To be fair it is mostly a way to prevent scammers from fleecing the common man.

It is unfortunate that the laws also forbid many sound investments, but not as large a problem as you might think because most of the real oppertunities would never have been offered to random people anyway.

You can just self-claim to be an accredited investor. I did this for ages until it started becoming true.

But it's probably best they stay private. As you can see in these HN comments, public investors lack the ability to see the project through. i.e. there will be failures, planned and unplanned.

This is also why I think Kickstarter projects should be restricted to people who understand that they can end up with nothing.

I know of at least a couple low-profile high-value things that are invite-only and I'm only a part of because I'm in the network. This is probably the future of these things. Being able to constrain your audience to only somewhat wealthy people insulates you from the lumpenproletariat, perhaps at the cost of some smart and unwealthy.

And to be honest, the lumpenproles usually demand to be protected from these things, so it's a good idea to give them that since there's an easy way to segment the population.

More info on what counts as an accredited investor:

https://www.sec.gov/education/smallbusiness/exemptofferings/...

When the company is private; it's hard to get access even if you are accredited.

If the SEC was the only barrier then millions of private investors would own SpaceX shares right now. Turns out Elon just doesn't want to sell to you.

I think you mean "doesn't need to" and some see this as a problem. What happens over time to people's retirement funds as the real stock market shifts towards private investment.

Then we go back to pensions and social security instead of gambling. Things would probably be better off that way.

How does one convert a 401k into a pension?

pensions don't work with a collapsing population

Reply on news.ycombinator.com