Read The Forum Rules: We have a clear set of rules to keep the forum running smoothly. Click here to review them.

Post Reply 
Investing SEC opens door to startup investments
Author Message
PolymathGuru Offline
Kingfisher
***

Posts: 758
Joined: Jul 2015
Reputation: 15
Post: #1
Big Grin SEC opens door to startup investments
New law makes investing in startups available for the masses


Some excerpts from the article.

Quote:The Securities and Exchange Commission voted to implement Title III of the Jumpstart Our Business Startups (JOBS) Act on Friday. Translation: It’s now legal for ordinary Americans to invest in startups and small businesses.

Unlike Kickstarter or GoFundMe, which allow you to invest in a product or idea like Spike Lee’s latest movie, the Keyboard Waffle Iron or potato salad and would in return get a token gift (or some potato salad), equity crowdfunding actually allows you to own a stake of the business. This could mean huge potential profits if the business succeeds or goes public; however, it could also result in steep losses.

Until now, you had to be an “accredited investor” to have equity in a private company. There are two ways to qualify -- and either way you have to be wealthy. Your income has to be at least $200,000 (or a combined $300,000 for married couples) in each of the prior two years. Second, eligible investors must have a net worth of over $1 million, either alone or together with a spouse (excluding the value of his or her primary residence).


Quote:Title III has been the most problematic point for the SEC -- primarily because it opens up average Americans to the private investing world -- and is one reason that part of the law has languished for the past three-and-a-half years. Of the four SEC commissioners, only one, Michael Piwowar, dissented in Friday’s ruling: “I fear that many traps for the unwary are hidden in the regulations, creating potential nightmares for small businesses and their owners who fail to place regulatory compliance at the top of their business plans. Such burdens will spook many small businesses from pursuing crowdfunding as a viable path to raising capital.”

Quote:The SEC has implemented caps for investors depending on income. If your income is $100,000 or less, you’re allowed to invest up to 5% of your income. Those earning more than $100,000 can invest up to $10,000.

“You can never make investing risk-free, but the SEC maximized transparency requirements. [Title III] is absolutely necessary for small businesses to expand and actually find responsible avenues to access capital,” said John Arensmeyer, CEO of advocacy organization Small Business Majority.

Quote:Sapir told Yahoo Finance that this is the first time that customers can truly “get in on the action.” Whereas entrepreneurs have to perfect their pitches to venture capitalists, this new avenue of funding allows consumers to invest in a company that they already know and love. Perhaps this will allow startups to be less dependent on VC funding in the future.

He also noted that individuals do have a lot more at stake, compared to institutional investors like VC firms. “New technology is bound to fail. But VCs have the capacity to take a loss. Entrepreneurs have scammed investors before. A small investor without as many resources has no ability to protect himself.”

I know there are some ballers rolling in dough on this forums. What are your thoughts on this? I don't think the barrier should be based on wealth. It should be based on years of practice in the stock market. If someone can actually sustain a portfolio for five years, that may be a good enough amount of time to determine if this kind of investment is suitable for them.

A Guide to Exploring and Relocating within the United States.

A Guide for Creating a Burner Laptop and installing TAILS OS for RVF and ROK security and anonymity

The four Multipliers of wealth and Income
11-06-2015 02:34 PM
Find all posts by this user Like Post Quote this message in a reply
Harvey Specter Offline
Robin
*
Gold Member

Posts: 146
Joined: Mar 2013
Reputation: 2
Post: #2
RE: SEC opens door to startup investments
(11-06-2015 02:34 PM)PolymathGuru Wrote:  
New law makes investing in startups available for the masses


Some excerpts from the article.

Quote:The Securities and Exchange Commission voted to implement Title III of the Jumpstart Our Business Startups (JOBS) Act on Friday. Translation: It’s now legal for ordinary Americans to invest in startups and small businesses.

Unlike Kickstarter or GoFundMe, which allow you to invest in a product or idea like Spike Lee’s latest movie, the Keyboard Waffle Iron or potato salad and would in return get a token gift (or some potato salad), equity crowdfunding actually allows you to own a stake of the business. This could mean huge potential profits if the business succeeds or goes public; however, it could also result in steep losses.

Until now, you had to be an “accredited investor” to have equity in a private company. There are two ways to qualify -- and either way you have to be wealthy. Your income has to be at least $200,000 (or a combined $300,000 for married couples) in each of the prior two years. Second, eligible investors must have a net worth of over $1 million, either alone or together with a spouse (excluding the value of his or her primary residence).


Quote:Title III has been the most problematic point for the SEC -- primarily because it opens up average Americans to the private investing world -- and is one reason that part of the law has languished for the past three-and-a-half years. Of the four SEC commissioners, only one, Michael Piwowar, dissented in Friday’s ruling: “I fear that many traps for the unwary are hidden in the regulations, creating potential nightmares for small businesses and their owners who fail to place regulatory compliance at the top of their business plans. Such burdens will spook many small businesses from pursuing crowdfunding as a viable path to raising capital.”

Quote:The SEC has implemented caps for investors depending on income. If your income is $100,000 or less, you’re allowed to invest up to 5% of your income. Those earning more than $100,000 can invest up to $10,000.

“You can never make investing risk-free, but the SEC maximized transparency requirements. [Title III] is absolutely necessary for small businesses to expand and actually find responsible avenues to access capital,” said John Arensmeyer, CEO of advocacy organization Small Business Majority.

Quote:Sapir told Yahoo Finance that this is the first time that customers can truly “get in on the action.” Whereas entrepreneurs have to perfect their pitches to venture capitalists, this new avenue of funding allows consumers to invest in a company that they already know and love. Perhaps this will allow startups to be less dependent on VC funding in the future.

He also noted that individuals do have a lot more at stake, compared to institutional investors like VC firms. “New technology is bound to fail. But VCs have the capacity to take a loss. Entrepreneurs have scammed investors before. A small investor without as many resources has no ability to protect himself.”

I know there are some ballers rolling in dough on this forums. What are your thoughts on this? I don't think the barrier should be based on wealth. It should be based on years of practice in the stock market. If someone can actually sustain a portfolio for five years, that may be a good enough amount of time to determine if this kind of investment is suitable for them.

A fool and his money are soon parted.
11-07-2015 09:20 AM
Find all posts by this user Like Post Quote this message in a reply
RawGod Offline
Hummingbird
*****
Gold Member

Posts: 3,060
Joined: Jun 2012
Reputation: 35
Post: #3
RE: SEC opens door to startup investments
Startups have been the bubble of the last few years thanks to all the QE fake money sloshing around. Every man and his grandmother is talking startups. Won't last much longer.

Dr Johnson rumbles with the RawGod. And lives to regret it.

I have had this sig since 2015 and received thousands of post likes; yet not one person has commented on my sig. Perhaps you're familiar with the work it parodies? Let me know!
11-07-2015 09:27 AM
Find all posts by this user Like Post Quote this message in a reply
[-] The following 2 users Like RawGod's post:
Designate, Bushido
Seth_Rose Offline
Pelican
****
Gold Member

Posts: 1,146
Joined: May 2013
Reputation: 29
Post: #4
RE: SEC opens door to startup investments
Relevant: Average Americans Can Now Invest In Startups – Don’t Do It! via Financial Samurai

http://www.financialsamurai.com/average-...ont-do-it/

Blog - Twitter
11-07-2015 10:30 AM
Find all posts by this user Like Post Quote this message in a reply
Designate Offline
Woodpecker
**
Gold Member

Posts: 380
Joined: Jan 2015
Reputation: 34
Post: #5
RE: SEC opens door to startup investments
Quote:The Securities and Exchange Commission voted to implement Title III of the Jumpstart Our Business Startups (JOBS) Act on Friday. Translation: It’s now legal for ordinary Americans to invest in startups and small businesses.

Unlike Kickstarter or GoFundMe, which allow you to invest in a product or idea like Spike Lee’s latest movie, the Keyboard Waffle Iron or potato salad and would in return get a token gift (or some potato salad), equity crowdfunding actually allows you to own a stake of the business. This could mean huge potential profits if the business succeeds or goes public; however, it could also result in steep losses.

For quality, outstanding and in-depth investment insight, one should always turn to Yahoo Finance.

Wtf

I think there is a time and place for these crowdfunded type investments, but if you want to the best yields you should always stick to doing your own deals.

The Startup Bubble is a near replica of the Dot Com Bubble. The gravy train will be ending very soon.
(This post was last modified: 11-07-2015 10:45 AM by Designate.)
11-07-2015 10:35 AM
Find all posts by this user Like Post Quote this message in a reply
[-] The following 1 user Likes Designate's post:
NovaVirtu
jamaicabound Offline
Pelican
****

Posts: 1,618
Joined: Feb 2014
Reputation: 21
Post: #6
RE: SEC opens door to startup investments
I forget the site but I always get emails from microventures or some site like that. They actually have an interesting startup you can invet in similar to a fanduel or something like that. In the past I would probably have been in in a minute, however I think these guys are all going to be regulated soon so not sure I like the business anymore. I think Nevada already banned it.
11-07-2015 01:13 PM
Find all posts by this user Like Post Quote this message in a reply
Easy_C Offline
Crow
*****

Posts: 4,372
Joined: Oct 2014
Reputation: 29
Post: #7
RE: SEC opens door to startup investments
Not QE directly. A huge part of it is that a "contagion" effect is playing out and looks to be about done.
11-08-2015 01:57 PM
Find all posts by this user Like Post Quote this message in a reply
[-] The following 1 user Likes Easy_C's post:
RawGod
jamaicabound Offline
Pelican
****

Posts: 1,618
Joined: Feb 2014
Reputation: 21
Post: #8
RE: SEC opens door to startup investments
Here is the microventures site which has some kind of upcomming investment for a "Fan Duel" like fantasy site...

https://microventures.com/proposed/fantasyhub
11-09-2015 11:00 AM
Find all posts by this user Like Post Quote this message in a reply
travolta Offline
Banned

Posts: 1,232
Joined: May 2011
Post: #9
RE: SEC opens door to startup investments
I think lots of people are going to be getting scammed very hard soon. There definitely is a startup bubble happening, especially in Silicon Valley. So many shitty companies getting more funding than they know what to do with. It's all hilarious actually, and the bubble will burst sometime sooner than later.
11-09-2015 08:58 PM
Find all posts by this user Like Post Quote this message in a reply
TheFinalEpic Offline
Pelican
****
Gold Member

Posts: 1,575
Joined: Apr 2014
Reputation: 26
Post: #10
RE: SEC opens door to startup investments
There's no such thing as a "startup bubble", if there was, new companies wouldn't be created. If you are willing to take a risk on a new company, you should be able to do this; the returns on home runs aren't percentages but rather multiples of your initial investment. There is a "tech bubble" in which these apps are getting valued at many times their actual worth, and when people realize that they will never return, then that will burst. We seem to associate "startups" with apps or shitty technology, but if you are actually founding a solid business (and I emphasize BUSINESS and not PRODUCT) this is a great thing for new companies. Its what was happening already anyways; I would go to family and friends first for investment, how many of those are traditionally "accredited investors"? A small percentage.

"Money over bitches, nigga stick to the script." - Jay-Z
They gonna love me for my ambition.
11-09-2015 09:10 PM
Find all posts by this user Like Post Quote this message in a reply
[-] The following 1 user Likes TheFinalEpic's post:
username
travolta Offline
Banned

Posts: 1,232
Joined: May 2011
Post: #11
RE: SEC opens door to startup investments
(11-09-2015 09:10 PM)TheFinalEpic Wrote:  There's no such thing as a "startup bubble", if there was, new companies wouldn't be created. If you are willing to take a risk on a new company, you should be able to do this; the returns on home runs aren't percentages but rather multiples of your initial investment. There is a "tech bubble" in which these apps are getting valued at many times their actual worth, and when people realize that they will never return, then that will burst.


Yea you're right. I meant to say tech bubble, not start up bubble. "Start up" is kind of a loose term anyway. The tech bubble will definitely not last forever. Too many shitty tech startups are out there and they're good at tricking VC's into believing they're offering value when they're not.
11-09-2015 09:54 PM
Find all posts by this user Like Post Quote this message in a reply
TheFinalEpic Offline
Pelican
****
Gold Member

Posts: 1,575
Joined: Apr 2014
Reputation: 26
Post: #12
RE: SEC opens door to startup investments
(11-09-2015 09:54 PM)travolta Wrote:  
(11-09-2015 09:10 PM)TheFinalEpic Wrote:  There's no such thing as a "startup bubble", if there was, new companies wouldn't be created. If you are willing to take a risk on a new company, you should be able to do this; the returns on home runs aren't percentages but rather multiples of your initial investment. There is a "tech bubble" in which these apps are getting valued at many times their actual worth, and when people realize that they will never return, then that will burst.


Yea you're right. I meant to say tech bubble, not start up bubble. "Start up" is kind of a loose term anyway. The tech bubble will definitely not last forever. Too many shitty tech startups are out there and they're good at tricking VC's into believing they're offering value when they're not.

Its a pretty meaningless term. People come up to me and say "you've got a startup?" No, I have a company, and I treat it as such, not as some budding infancy.

Go on angelist or any of these crowd funding sites, you will laugh at the kind of projects that are getting funded that are totally pointless or downright idiotic ideas. That's the issue. Regardless, this money isn't being "thrown away", it just circulates in the economy and helps other more meaningful companies find their funding. Money isn't a scarce resource, but you also cannot be building liabilities as companies; it's just bad business yet so many people are and have been getting away with it for too long.

"Money over bitches, nigga stick to the script." - Jay-Z
They gonna love me for my ambition.
11-09-2015 10:34 PM
Find all posts by this user Like Post Quote this message in a reply
Post Reply 


Possibly Related Threads...
Thread: Author Replies: Views: Last Post
  How To Find Door To Door Salesmen Westcoast99 3 995 02-12-2019 06:20 PM
Last Post: BlastbeatCasanova
  True Passive Income Investments samsamsam 85 39,261 01-09-2019 11:46 AM
Last Post: DJ-Matt
  Top investments on yourself for less than 500 dollars/euros pk9090 7 1,633 12-11-2018 08:18 PM
Last Post: NoMoreTO

Forum Jump:


User(s) browsing this thread: 1 Guest(s)

Contact Us | RooshV.com | Return to Top | Return to Content | Mobile Version | RSS Syndication