[nightski]

So all of that is possible in today's economic model. You don't need to make capital investment illegal for that to happen. Looking forward to the next crowdfunded carbon capture worker cooperative. Heck the SEC just raised the crowdfunding limit for startups to $5M so time will tell.

I do find it interesting that your social circle is willing to bet their entire net worth on a risky startup where the reward is a salary cut in the worker cooperative + some savings account level interest. The "funding" bit is the key. You waived over it with crowdfunding, but now it's like buying lottery tickets with low payout. Pay $20 for a 20% chance at $40 in 10 years! You'll make the world a better place!

[KittenInABox]

Even in the example you provided a labor-led, democratically funded entity can only receive 5M while capital-led, private investor funded entity has no real limit.

[nightski]

Investing in startups is hard, as I am sure Y-Combinator would attest. The layperson is not prepared to invest in them. To vet the companies, their leadership, the feasibility of their ideas, etc... Especially with a low payout. I can understand the SEC's hesitation as this could easily lead to scams. Just look at kickstarter and all the things that have gone down there.

Really what the parent is proposing is something like -

Here is a savings account. You can throw chunks of money in it at startups that have a high chance of failing. But if they succeed you'll only earn bank level interest since it's not capital investment. So you have a small chance at earning bank level interest.

Where is the incentive?

[rmah]

"I can understand the SEC's hesitation as this could easily lead to scams."

It's not "could", it's will. With 100% certainty. The only question is how many and hard they will be to control. We know this because it has happened before.