Re:Tesla Was Cash Flow Positive Last Week, CEO Musk Says
by makomk on Wednesday December 05, 2012 @06:23PM
(#4879240)
Lawyers and governments haven't strangled those bootstrapping methods - scammers have.
Selling a few shares at a time to individuals is a really expensive and time consuming way of raising money, so the only reason to do it is if you can't raise money from larger investors. Now, sometimes there's a non-shady reason for this, but more often than not the reason is that small-scale investors can't afford the same level of due diligence to detect scams and can't afford to take legal action if the whole thing implodes. (We saw this with the Perma-Pave ponzi recently - it took one of the larger investors investigating, finding evidence it was a ponzi, and suing for anything to happen. The smaller investors were stuck flailing around amongst misinformation from people involved in the scam.)
Selling a few shares at a time to individuals is a really expensive and time consuming way of raising money, so the only reason to do it is if you can't raise money from larger investors. Now, sometimes there's a non-shady reason for this, but more often than not the reason is that small-scale investors can't afford the same level of due diligence to detect scams and can't afford to take legal action if the whole thing implodes. (We saw this with the Perma-Pave ponzi recently - it took one of the larger investors investigating, finding evidence it was a ponzi, and suing for anything to happen. The smaller investors were stuck flailing around amongst misinformation from people involved in the scam.)