[breckinloggins]

The nice thing about Crowdfunding is that, like traditional trading, motivations vary.

For example, I recently backed the Infrared Human Vision study on Microryza [1] simply because it sounded like cool research. I backed the Ubuntu Edge even though I knew it would most likely fail to reach its funding goals because I wanted to send a message that there's a market for a "pocket to desktop" convergence device. I sent a few dollars to Oculus on Kickstarter because I wanted to see that become reality.

I'm not naive... I know that as this gets bigger there is going to be room for technical trading, abuse, and an emergence of some myopic thinking similar to the "quarter-by-quarter" tunnel vision that plagues public companies on Wall Street. But the thing I like the most about crowdfunding is that it takes this long-standing idea of "principled investing" and really lets you put your money where your mouth is.

[1] https://www.microryza.com/projects/can-we-biologically-exten...

[pcowans]

From the article: "To be clear, Malik isn’t talking about Kickstarter where funders make a donation that acts like a pre-order. He’s talking about the public buying stock in private companies, something that may soon be legal thanks to the JOBS Act..."

[wmf]

I think breckinloggins's point was that people may be willing to make equity investments for reasons other than profit.

(Now I'm wondering whether startups will be allowed to offer rewards in exchange for funding, leading to more "X is not a store" backlash.)

[arbuge]

>> The nice thing about Crowdfunding is that, like traditional trading, motivations vary.

Most certainly they do but I'm guessing that a large chunk of the crowd will be going into this thinking it's a surefire way to make money.

[dvanduzer]

I've been advocating Crowdfunding for years, but specifically with the assumption that it would be a mechanism to help the middle class diversify their investment portfolios.

The questionable wisdom of this assumption has been pointed out to me several times. So just now, I looked up the stock market crash of 1929, and it tells me that only 16% of U.S. households were invested in the stock market at the time. The bigger problem (ostensibly) was that commercial banks were too heavily leveraged in the market.

So we get Glass-Steagall and the Securities Act of 1933 out of all that. The "separate commercial and investment banking" clauses come out of the former. The "accredited investor" clauses that prevent true crowdfunding come out of the latter.

In 1990-something, Clinton weakens Glass-Steagall. In 2012, Obama signs the JOBS act, which weakens some "accredited investor" parts of the SEC.

So now, in retrospect, are we more worried about a weak Glass-Steagall after 2010?

Or are we more worried about policy that would have only protected 16% of households in 1929, and since then, has excluded ~99% of Americans from early stage investment?

edit: a $1,000 investment at Google's IPO would be worth $10k today. however, a $100 investment early in Google's history would also be worth $10k today.