Precisely because its illegal to do it otherwise..you are making my case for me with this statement.
> If the increased capital is coming from employees, then this is just a circular transaction: the money goes from the employee, to the company, back to the employee again = no net financial difference.
It could be divested from other less profitable capital investments like index funds, real estate or straight down cash. That lower competition of capital for startups means less startups and thus lower wages.
> Oh no! Juicero would never have existed!...Wait, that's a good thing, and the very existence of Juicero and other wasteful startups suggests that the problem is too much capital, not too little.
Thats your opinion, but you are making a comment on a site run by an institution whose primary goal is to make more startups.
Actually, for non-startups (i.e., 99% of new businesses), loans from banks, family, and friends, are the primary form of investment. This method of investing does not require the investor to be accredited.
Neither could employees that have access to internal financials.
Investors are also not entitled to internal financials. They might have a right to financial statement, but those are very different things.
Employees get lower wages because there is less capital invested
If the increased capital is coming from employees, then this is just a circular transaction: the money goes from the employee, to the company, back to the employee again = no net financial difference.
Founders get less money In the real world, founders borrow money, which forces them to be calculating and spendthrift with their cash.
Fewer startups are created
Oh no! Juicero would never have existed!...Wait, that's a good thing, and the very existence of Juicero and other wasteful startups suggests that the problem is too much capital, not too little.