This is one reason ICOs will hopefully disrupt VC strangehold. It's senseless for the fate of good companies to be determined by bogus social dynamics.

I get the regulation argument, but protecting stupid people from themselves is a losing battle. Everyone will know not to mortgage your house to invest in a new startup the same way everyone knows not to do heroin. Some people will anyway. But they already can participate in ICOs illegally, so it's a pretty decent analogy.