[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.