Brave new world in investing

It’s the Wild Wild West out there

Investor beware. With startup scene hotter than ever, retail investors have been clamoring to invest in the space. So far crowdfunding has been limited to accredited investors - generally high net worth individuals and instiutitions. So if you're not worth north of $1 million(no, your house doesn't count) or earning >$200K per annum, tough luck. Drool over angel investor success stories or laugh at those who got burned. No more.


The adoption of new SEC rules allowing non-accredited investors to invest in return for equity represents a major breakthrough.  Previously, crowdfunding sites like Kickstarter allowed donations, for no equity in return or Wefunder which only permitted accredited investors to access equity stakes. With the new rules, retail investors can now jump in, albeit with some limitations as summarized here.

What could go wrong? 

Venture investing remains a risky business; none of this has changed with the recent announcements. The long term returns to capital across the venture capital space remain positively pedestrian, the recent tech boom notwithstanding. For every Facebook and Airbnb, we have countless other startups muddling through or worse, going belly up.

A deeper problem lies within the ability of these retail investors to perform appropriate due diligence on prospects. The recent Theranos debacle exemplifies the difficulty this presents even for storied, well-resourced venture firms.

TL;DR: New SEC rules allow non-accredited investors to fund startups. Venture investing remains risky and may leave many burned, due to difficulty in due diligence 

Reminder that Kickstarter has a few problems of its own:

A concrete technological solution to gun control is already here.

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EDITED: A friend has taken my suggestion to heart and will be creating a non-profit to launch an effective grassroots campaign against mass shootings. Please visit his Gofundme page here:

Yesterday's shooting in Umpqua is tragic but it is hardly surprising. As of yesterday there had been 294 mass shootings in the United States in only 274 days. There could literally be a cable channel devoted to 24/7 coverage of mass shootings (Roger Ailes, I'm looking at you). 

You've been bombarded by coverage and numbers in the last 24 hours so I won't repeat them all here but I do want to make a concrete proposal for a grass roots effort to finally put these tragedies firmly in our nation's past.

After the Sandy Hook shooting left 20 children dead more than 90% of Americans favored stricter gun control laws and yet those laws fizzled in congress. Why?  The NRA spent approximately $35M ensuring that gun control would not happen in 2014. In non-election years their spending drops off dramatically but is still a substantial force. I don't know if the NRA is entirely to blame for this country's inaction on gun control but it certainly has been a huge factor.

$35M might not seem like much money but the average congressional campaign is "only" around $1M. If you look at just the primary portion of the campaign it is probably substantially less,. For the sake of argument lets say the average primary portion for a Congressional Representative's campaign is $500,000. This means that the NRA can pay for the campaign of 70 representatives in Congress or about 15% of Congress. Compounding this, the NRA doesn't need to spend money to get the votes it wants. With the war chest it has at its disposal, the mere threat of funding a challenger is enough to convince most Congressional Representatives to cave to NRA demands. The answer to getting rational gun control laws passed then has to be to defeat the NRA. 

Here is how we can take the NRA out of the equation. We start a $1000 campaign for every person killed in gun violence in this country. In 2013 that would have raised $33M, enough to counter the NRA dollar for dollar. If we also launched a $500 campaign for everyone injured but not killed in gun violence, we would have added an additional $42M in 2013. Every person killed or wounded in gun violence has family, friends and a community who love them and who would gladly contribute towards ending gun violence in the name of their loved one. 

Technology in the form of gofundme has provided us with an opportunity to make major change in this country. We can outspend the NRA more than 2:1. We can defeat them together and we can make this a safer place for all of us to raise our own families.