There are a number who are afraid of equity crowdfunding for the reason that some consumers will get fleeced. While that is an admirable sentiment, if it was frankly more genuine there would be more effort put into curbing the thousands of "financial vehicles", payday loan companies and MLM's that scourge the poor. This isn't that. Yes, we need limits and constraints, but there's too much at stake to throw the baby out with the bath water.

I think that it needs to be paired with an elaborate vetting process that still is missing in crowd funding projects. Why can't we have organizations that provide Technical Due Diligence, etc.?

In other words, I completely agree with you. Currently VCs (and many Angels) are like major label record companies: they are more risk-averse than they realize, they operate in a strict handful of myopic categories, and they are unashamed of the old boys network aspect of it. It's all ripe for disruption, and while the effect of that might mean some consumers will be cheated, we can mitigate that portion. And the upside is huge. You are right, it would absolutely "cause technology to accelerate even more in the future." The future could be much brighter if we can figure this out.

Your idea for technical vetting organizations is an interesting one that might solve some of this, but unless it's mandatory for getting investment, I imagine that most companies won't bother.

This is sort of the function that syndicate leads can provide, though.

And my point is that I'm really driven by the upside here. We're on the cusp of huge technological change and what's holding us back is the pedestrian way we're approaching it. We're facing 21st century potential with 1960's Mad-Men-styled cigars and handshakes.

This tide will lift all boats. (Yes, silly and fraudulent projects will get funded, maybe even more so, but so also will the truly innovative projects we didn't even know we've been waiting for.) This is the moment in history when we need to liberate innovation from the current gatekeepers of sweaty bald men in suits who are really just looking for Facebook and Snapchat clones, to the public to better unleash the potential of what's possible.

Maybe there's a way to structure this to get the benefits while still protecting the little guys. Maybe the new law's restrictions are enough, since they'll ostensibly be enforced by the gatekeepers who facilitate the investment. I certainly hope so.

That's still a big problem. Read "The Wolves of Tel Aviv", about the "binary option" scam industry.[http://www.timesofisrael.com/the-wolves-of-tel-aviv-israels-...] About 0.7% of Israel's GDP now comes from this scam, and that's just the part that pays taxes.[http://www.globes.co.il/en/article-binary-options-worth-125b...]

There are risks indeed to crowdfunding, but not wholly unique ones. All one has to do is browse penny stock boards, or perhaps Bitcoin boards, these days, to find scams currently in progress and bagholders left with nothing but broken hope. Equivalently, a lot of VC-funded companies are in it to build up an impressive but fragile organization quickly and then hand it over to someone else before it explodes.

The change here is merely that we are removing gatekeepers to participating in the action at all, and the illusory veneer of stability that affords. Every company is built on some degree of faith, and that makes early investment a largely irrational proposition. The question to focus on is not "how much abuse will ensue" but "how do we mitigate damage", a question not really asked at the high levels because it is dangerously close to revealing how power works.

If anything, Kickstarter et al have proven there's a massive market demand for it. It's just been the good old boys at the SEC who have been slow to catch up, even when given the mandate to.

The purpose of VC and angel investing is to be risk tolerant, and this is extremely risk intolerant.

I'd personally rather have few major shareholders on board who understand business and get it, than X amount random people all having their own ideas.

It does give more power to entrepreneur, as with more options you negotiate better investment deals.