a new NASDAQ... could that even be done today, or is the regulatory barrier to creating a new public trading so great that no one would undertake it? phrased another way: if this opportunity is there and no one is taking it, why?
I've always found it very strange that the average Joe can mortgage his home, sell all his family's belongings, and go to Vegas and lose every penny. People will talk about what a bad person he is.
But that same average Joe, if one of us were to ask him to participate in our startup? Suddenly everybody and their brother is all concerned about Joe being taken to the cleaners.
I'm not saying we need the Wild West out there, simply that, as the author says, the way things are right now are seriously out of whack. This is not especially good or bad for Joe: people with poor spending habits have a nasty tendency to lose all of their money. But it's really bad for startups who need a little cash, some of which could succeed and do all sorts of cool things.
As a class, the rich do not want Joe Average investing in startups. It creates more competition and dilutes the power of their capital. So the rich conspire with Congress to create laws that block Joe Average from these markets.
Most "progressive" regulations treat adult citizens as children and are really designed to lock-in the status quo.
As a class, the rich do not want Joe Average investing in startups.
I've known a ton of reach people in my life, and I have never, ever heard any of them mention that they don't want Joe Average investing in startups.
In fact, I've been talking to dozens of rich people in the past two weeks, about how to make working on http://hackersandfounders.com financially sustatinable so I can work on it full time and help thousands of founders and hundreds of companies succeed. Every single "rich" person that I've talked to has been exceedingly helpful and encouraging.
Why? Because the thought of helping hundreds of founders build successful companies and get rich in the procees is really exciting to them.
It creates more competition and dilutes the power of their capital.
Your understanding of capital and markets is severely flawed.
If a rich person owns 10 shares of a startup's stock, and they are by law only able to sell that to a maximum of 500 other rich people, then there is a very limited market for that stock, and the value will remain low.
If however regulations were to change, allowing the public to have easier access to those shares, then the value of those 10 shares increases because there is greater demand, and more buyers.
So, if the public can purchase those shares, with the hopes that they will get richer by holding those shares. And, the rich person gets richer because he sold the shares at a higher price than what he would have normally.
Your comment "dilutes the power of their capital" is quite simply wrong.
* So the rich conspire with Congress to create laws that block Joe Average from these markets.*
It was actually the Enron scandal which brought about the Sarbanes-Oxley act, which profoundly changed the accounting regulations that corporations have to adhere to if they are going to go public.
As an unintended consequence of that legislation, it made it a lot harder for startups to IPO because of the increased cost and accounting burden required of a corporations before they go public.
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I'm finding it harder and harder to participate in HN discussions when comments like the above get 10 points instead of buried.
I found the relative scores on these two comments irritating too. You're clearly right. I pitched in and modded, but: wouldn't a better solution here be to just stop showing the scores on the comments please Paul Graham? Just show us our own scores. There is no reason for us to waste energy fretting about the kind of person who would value this comment lower than its parent.
When even VCs bat .200 and the best ones .300, how is Joe Public going to pick startups? This is contrary to my own free market views to some extent, but just because we allow Joe Public to dabble in other financial products that maybe deleterious to him doesn't mean we should allow him to invest in the next startup. For every good startup idea and team out there, there are plenty of bad which are more the rule than the exception.
