[ringaroundthetx]

Its just a liberal contract, and you just have to hope they won't do it the way this article flags.

Most crowd sales have unlimited discretionary use of the funds, and that doesn't mean you can't make a profit, especially if you receive something tradable back.

This is probably another reason why equity companies (or at least, purchases of their private equity) are going to go the way of the dinosaur, without liberalizing a liquid secondary market, now that there are alternatives available.

[JackFr]

Existing securities laws didn't develop in a vacuum - they were a response to real problems in capital markets. Receiving something tradeable presupposes a counter party to trade with. Those likely will be in short supply once you've bought a lemon.

A secondary market which eschews many of the practices of the established markets vis a vis investor protections, and relies on information discovery and reputation, eventually will develop so much friction related to those costs as to stop being viable.

[JumpCrisscross]

FYI, you're arguing with someone who literally believes investor protections aren't necessary for liquid investments [1].

[1] https://news.ycombinator.com/item?id=15134630

[ringaroundthetx]

thats not what that says

what people tolerate has nothing to do with my "literal beliefs"

[ringaroundthetx]

> Existing securities laws didn't develop in a vacuum - they were a response to real problems in capital markets

They were still developed in a vacuum. US securities laws are 90% promulgated by the SEC unilaterally, for quite some time, and even when Congress is involved the SEC still spends years warping the intent and implementation of the law. The SEC's public comment periods are a total farce and their decision is unilateral, doesn't provide more confidence in the markets, hampers interstate commerce, usually increases transaction costs and the cost of capital, and doesn't prevent scams.

There are alternatives now.

[JumpCrisscross]

> equity companies (or at least, purchases of their private equity) are going to go the way of the dinosaur

Source?

[ringaroundthetx]

This year the source is the collective conscious that sees and uses the alternative ways of raising or transmitting capital, who can tolerate the lack of consumer and investor protections because of the immediate liquidity benefits allowing them to manage risk

There is no dissertation on it, at best you'll find some charts showing side by side comparisons of what you get with the antiquated share company - a technology from 1600 AD - with what is available now, and you couple that with the size of the deal flow and extrapolate what can happen next

[JumpCrisscross]

> [investors] can tolerate the lack of consumer and investor protections because of the immediate liquidity benefits allowing them to manage risk

Huh, didn't think we'd reach this point this fast.

[JackFr]

> the immediate liquidity benefits allowing them to manage risk

Sure, everyone loves liquidity and anyone can manage risk in an orderly two-sided market.

If there is 1) no legitimate profit-making endeavor backing your security & 2) no current bid, your security is worth exactly $0. You have faith that we needn't worry about (1) because (2) will never happen. I don't.