[digikata]

The purpose would be to learn more about the inevitable practical problems that come up between a system concept that pencils out to be more efficient and a real operating system. I think we stand on the shoulders of giants giving an incredible science and tech foundation to work upon. However, all that knowledge can give us a false sense of how difficult it is to cross into unknown territory (e.g. when assembling a new system from well understood elements, like hyperloop).

[ChuckMcM]

I understand the purpose, but what I don't understand yet is why would you ask retail investors to fund it at this level of risk? Remember, these guys aren't associated with Musk in any way [1], they are just taking the ball and running with it. So huge risk, probably going to flame out, very small chance they become the folks with the 'expertise' in building Hyperloop type systems and thus the primary engineering contractor for building them.

Since they aren't one of the big engineering infrastructure companies (Halliburton, Bechtel, Etc.) its unclear what they can do if they run into hiccups (like say nobody can fabricate the parts they need).

So do a $100M series A? Sure I could see that, a collection of billionaires wishing to bet on them making something that can work, but we should have trained people in the 90's to not buy stock in companies that have no hope of revenue in the forseeable future. (and say what you will of the recent Tech IPO's they have all had revenue)

[1] "Now, the company Hyperloop Transportation Technologies Inc. (which is not affiliated with Musk or Tesla) has inked a deal with landowners in central California to build the world's first Hyperloop test track"

[digikata]

As long as the investment context is disclosed, why shouldn't there be long range, high-risk investments available in the market to interested buyers?

Edit: I agree with you that the risk is very, very high. But, it at least gives a non-zero potential for investment return - which on that level is better than, say, Kickstarter.

[ChuckMcM]

This statement : "why shouldn't there be long range, high-risk investments available in the market to interested buyers?"

Implies that they are not, and it is not true. Long range, high risk investments are available to any interested buyer.

Generally the challenge that comes up is that the SEC has set standards for someone to meet in order to be a "qualified" investor. Some people interpret those standards as a way of "keeping people out" of investing, but that is not the case. They are there for two reasons, one so that when those people lose all of their investment they aren't "damaged" and more importantly so that unscrupulous sales people cannot dupe people who are unable to distinguish risk for themselves into investing.

So I understand when a smart person who is chafing under the restriction of not being qualified from preventing them from a certain investment. But they have to realize that they are not the ones being protected. The elderly who are being promised a "guaranteed" 20% return on the last of their life savings by a boiler room broker, they are being protected.

Further, qualifying, is simply a matter of building up your portfolio to demonstrate you have the knowledge and presence of mind to make those decisions and if they go badly you knew the risks. The youngest person I've met who was a qualified investor was one pretty much right out of high school. He had started with $5,000 in a Charles Schwab account (his college fund) and moved it over to E-Trade when it was at $30,000 and was over a million about a year after he had graduated high school. He read a lot, developed a much deeper understanding of finance than I will probably ever have, and showed me just what was possible for someone determined to get there. Nearly every day there are stocks that move up by more than a few percent, and if you can anticipate that movement more often than not you can move a portfolio along.

And I would have no trouble whatsoever with these guys on a road show trying to drum up investment. And as I've said I'll read their S-1 with interest. I would not want them to do this raise on the general market because that opens up defenseless people to get hurt by folks who just want to push shares.

[digikata]

I'm no expert in this area, but when you mention qualified investors, I think you're describing private investment where qualified investors are required because those investments otherwise have a much lower bar of disclosure and analysis. The thought is investors there need additional protection and if you're qualified you can fend for yourself.

On the public market, the disclosure requirements are much higher, and you're more likely to find analysis, public articles and reports or other analysis you can buy. As far as I know, there's no qualified investor provision for buying stocks on the public market. In the end you can personally wish this company doesn't offer an IPO, but I don't think there's any systematic rule that prevents it as long as they file all the required disclosures and find a financial firm willing to do the administrative work of putting the shares on the public market. (Again though I'm no expert here... so it would be interesting to learn more.)

On the public market, one could class many tech companies in the long-term, high risk, show little to no profit category.

[ChuckMcM]

I think you've got a good understanding of it the difference between qualified an non-qualified.

The disclosure requirements will, I believe, kill any chance HLT has for doing an IPO. I would worry if they were able to get past that hurdle.

My response was more for people who complain they can't invest in pre-ipo companies when they don't meet the qualified investor criteria.

[danielweber]

Selling an unready product to retail investors indicates more of a desire to pay themselves six figure dalaires for 5 years and then somberly declare the thing a failure.