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.
<meta>
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.
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.
<meta>
I'm finding it harder and harder to participate in HN discussions when comments like the above get 10 points instead of buried.