Hacker News new | past | comments | ask | show | jobs | submit login

I've never really understood the reasons for limiting investors in companies to those who are already rich. The current crisis was in no way caused by anyone investing in startups or small businesses. The crisis was caused by too much credit flowing into all the wrong hands due to the incentives that existed for that to happen. The crisis of 1929 had the same cause. The problem is inflation plain and simple. The animal spirits that Keynesians are invoking now were not the cause of the housing bust-the fundamentals just were not there. They weren't ever there. Inflation hid that fact for years from many people.

These sort of regulations seem to have the effect of keeping more people in the middle class. I don't like raising the limit or messing with what exists now partially because what's there is absurd. The government wants to blame the market for its own failures and bad actions but it's not true. Even Bernie Madoff is a direct result of the Fed killing yield causing investors to seek returns wherever they could find them.

Dodd is in the pocket of the bankers and always has been. This last reform bill is a final gift to the elites on his way out the door. These sort of rules only strengthen the Fed and its control over the banking system. Not sure why anyone would be listening to Dodd and hoping he would do some good in the world.




"Even Bernie Madoff is a direct result of the Fed killing yield causing investors to seek returns wherever they could find them."

You make the right point about the fundamentals not being there for the housing bust. However it is hard for me to take you seriously when you say things like the above. Investors are always seeking heavy returns -- and Madoff didn't start a Ponzi scheme because of the Fed he did it because he is greedy.


When banks are offering 1% on deposits you are going to have weird situations arise where actors in the market are seeking yield on their money. Even Geithner acknowledged that.


because not everyone invests in Google...for every Google there are thousands of companies that crash and burn. Just look at YC, a savvy investor by any metric, with hundreds of startups under their belt...and they had what 20 exits?

It's easy to sell a startup investment to non-savvy investors..."invest X into our company and 5 years from now you'll be a millionaire!"

A millionaire can afford to lose 50-100K on a bad investment, someone making $40-50K a year cannot afford to lose even 15K.


Can't they decide that? Wouldn't they be in the best position to know that first hand? Why do you think you know better? How could you possibly know better?

The same argument exists for why Social Security is a good idea. Right now the government takes 15% of my income while saying they know how to spend it better than I do. They've started wars, bailed out G.M., the banks, and whoever else has paid them off. It seems like they're not to be trusted with much of anything that matters.


The same argument exists for just about every fiscal requirement the government imposes on us, that doesn't mean it's not necessary.

People on HN are not normals. If the USA was filled with nothing but hackers, we probably would do just fine with a more libertarian set of policies. Unfortunately, we're the fringe, and we have to pay for the masses' mistakes.

Many normals would gamble away their wealth. Without social security, many people would be ruined and too old to sustain themselves.


no they can't.

unlike real gambling where there are real odds of success, startups are a crap shoot each and every time. There is no science, no formula for success. Even the best investors, the ones who get the BEST deals like Ron Conway, don't have a perfect track record.

And unlike big time investors like YC/RC, these are the people who'll be investing into 1-2 companies max(no diversification), who won't know what they are doing. Who'll be gambling with money they can't afford to lose.

The networth requirement isn't there to stop investment, it's to stop investment from gullible investors who'd likely be defrauded by snake oil salesmen pitching their startups.

OF COURSE the site will make $5 million in 3 years. OF COURSE you should invest in us. YOU CAN'T lose. Hockey stick, hockey stick, hockey stick.


Real odds of success? In gambling, for the house (or state lottery) to make money, the expected value of your bet has to be negative. This is not the case with investments in start-ups.


Are you sure?

90% of VC backed startups fail. What do you think that number is for angel backed startups?




Consider applying for YC's Fall 2025 batch! Applications are open till Aug 4

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: