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While I can appreciate this approach from a one-off perspective, it seems like it would make more sense to package this process up, like some of the micro-lending services. The key difference is that there's no fixed interest (compound or simple) on the investment, but the sky is the limit. Call it anyVC.com. You'd allow people to submit their startup idea, business name, contact info, anticipated operating expenses, fund-raising goal, and so on. Once anyVC.com had accepted the venture for presentation to it's users, anyVC posts these ventures with an "Invest Now" button. Or have an auction-type interface: X-many dollars at y% stake in company per dollar. You could just queue those up from smallest stake per dollar to highest. (Funds would probably have to be escrowed, so there'd have to be some serious legalese and possible snail-mail notary-public stuff going on to sign up to become a microVC. Maybe that's a show-stopper.) Then, the entrepeneur looks at his queue and begins accepting funds from the smallest-stake per dollar to the highest. This might limit certain exit strategies, like incorporation, unless anyVC.com aggregates the various micro-investments, paying out to the micro-investors when they want to cash out, minus a small handling fee. The firms would then be subject to some oversight from anyVC.com, and joint reports would be filed to the micro-investors via the web site, or via a private channel if security is an issue. (Maybe the micro-investors have to be under NDA or non-compete?) Has something like this been done? If not, have I overlooked something glaringly obvious that makes this impossible? Edit: This may make even more sense in a tight credit market. |