Posted by jez 16 hours ago
Disgusting rip-off of consumers, yes, but even worse is the rip-off of merchants.
Unfortunately you need to be an accredited investor to access these markets.
This is the real gatekeeping here as rich pop stars, actors, sports stars and musicians who aren't versed in tech has more access to investing in these private companies than the academics, students in europe creating the algorithms that power them.
An 11 year old can inherit $100 million and be more "accredited" than you, even though they (may) have no knowledge of the industry, no investing experience and no years of industry experience.
Even if you have knowledge in the tech scene and you know which companies are going to go big in the future, unless you're ultra rich already to qualify as accredited, you're shut out early on.
Stripe being able to find all the capital they need in private markets is the actual indicator of wealth disparity.
Stripe might not need your money now, but they certainly needed it at the pre-seed, seed stage where if you were an angel/seed investor you would have been able to participate.
There is never a point in the lifecycle of any of these companies where they wanted random retail investors with no network on their cap tables. The kinds of companies that do want those investors tend, for clear reasons, not to be the kind you want to invest in.
You don't want accreditation rules relaxed or eliminated. You simply want Stripe to be a public company instead of a private one. Fair enough, but Stripe doesn't want to be a public company.
With Stripe's non IPO example, many will follow and will stay private.
So more gatekeeping.
I mean this respectfully, but: you do not sound, in this thread, like someone whose registration on Stripe's cap tables would be a service to Stripe. To society? Maybe? Who knows. But that's not how Stripe makes decisions.
I also think you drastically overestimate how much broad wealth creation would follow from letting retail investors into private tech companies. You're debating entirely based on a survivor artifact and ignoring the fact that most tech companies --- even most of the highly-capitalized ones --- return $0 to investors.
I am in and have invested in YC startups, because I know which ones have growth potential and upside.
> you can make a coherent case that companies should be required to be public at a much earlier stage (I don't think it's going to happen, but you do you)
I didn't say they had to be a public company, you can invest in Stripe via the secondary market (which I have done before with other companies) but even then this is for accredited investors.
There are lots of unprofitable public companies on the stock market that also return $0 to investors and have no dividends.
But this trend of many private companies choosing to stay private obviously isn't going to help those except the very rich and accredited investors.
I don't invest in tech companies.
Most funded tech companies don't return funds to investors. Noncontroversial claim.
Investors invest in tech companies as a/in a portfolio strategy. They don't expect any one investment to succeed, and they allocate to the asset class in part to get exposure to decorrelated assets.
That's not at all what retail investors are doing.
You keep talking about accreditation. The companies you want to invest in don't want your money and they don't care that you're accredited.
You don't know that 100% and unfortunately for you the YC companies accepted my money and I now hold stock in these companies.
I don't know which companies you tried to invest in (tech or not) but I am assuming most of them rejected you given your constant projecting towards me.
I don't want smart people/investors who saw the future early (most that are retail and some are academics who actually build this tech) who want to get exposure to the growth companies making an impact to use extremely risky and shady financial vehicles like Multi-Layer SPVs and tokenized private stocks just to get some exposure.
When all in all it isn't the real thing and they get rugged anyway.
As long as people like you are in favor in excluding these people who just to buy a private company stock on secondary markets, then the gatekeeping will continue.
I and may other angel investors are proof you're obviously wrong so...
Your words, you should own them.
I only want more smart people I know to have the chance to be angel investors in these companies and to be able to access secondary markets to buy and sell these shares.
What's wrong with that?
I'm glad you have friends at other startups that want to work with you. That's not something you're going to be able to say about a random person.
So you have to prove that either you can afford to lose some money or you have enough investing knowledge to know what you're getting into. Seems fair.
Seems "fair" to be honest.
I have a few friends that that have told me about certain companies they would like to invest in and they are knowledgeable about but they cannot access them but I can and not give them any shares.
Still, the theory is that having $100 million, even as an 11 year old, means you have about $90 million more than most people to lose before it even becomes an issue. Hence "accreditation". Accreditation isn't about "can you make smart investments" but about "will you be broke and destitute soon", and having $100 million makes it harder than I'd $400k is your life's savings, and you're about to put it all into NFTs.
Is the theory, anyway.
If anything they should also restrict options trading, sports gambling, prediction markets etc. to accredited investors.
Not saying meme stocks should be a thing but no one gets investigated or in trouble. Nothing is done. If they cared about the average person something would be done.
Sure, they can invest in public companies but if lots of these high growth companies stay private, the gains will not be shared towards retail especially for their pensions.
I never said wealthy, I said "retail investors", and most retail investors are not wealthy. Maybe you've been reading off Twitter and got that mixed up.
Your words not mine, but I'll just say the wealthy have more options than retail.
Shame, because I know some smart people who want to invest in the same companies as me and cannot and have to wait until it goes public for a that chance (if that ever comes)
Now with most growth companies staying private these people won't get a stake in the future and obviously you're fine with that.
I wonder if you would think it would be fine (if not great) if Google, Apple and other companies would just stay private in another universe.