Re:The ugly side of Kickstarter
by defen on Sunday April 22, 2012 @12:58PM
(#3875348)
Do you know how much of a nightmare it would be for a small startup to deal with thousands of effectively anonymous investors, each of whom has only invested a few tens or hundreds of dollars? You have to deal with voting rights, transfer of equity, shareholder lawsuits, etc, of people who you have no previous contact with and no way to vet. What's to stop a competitor from "investing" in your company to gain access to your financials? It just doesn't seem like the risks and costs are worth the reward.
[ Parent
| on HN ]
And another problem is that most of them are not "accredited investors".
From: http://paulgraham.com/startupfunding.html
The SEC defines an "accredited investor" as someone
with over a million dollars in liquid assets or an
income of over $200,000 a year. The regulatory burden
is much lower if a company's shareholders are all
accredited investors. Once you take money from the
general public you're more restricted in what
you can do. [1]