The SEC is taking a whack at broadening the definition of accredited investor, though proposed rules don't broaden in a way that most natural people working in tech will be that interested in. https://www.sec.gov/news/press-release/2019-265 … They're soliciting comments.
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Investors who seek volatility out of a desire to consume gambling are probably doing something which is against their interest, but they're a Robinhood account application away from e.g. making 100:1 bets on options which will expire worthless in less than a week.
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People invest in tech startups for all sorts of reasons, but one of them is the desire to 100X their money by causing something novel to exist in the world. Very, very few angel investments will succeed in doing this.
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But given that there is risk appetite in the world and that retail investors possess some of it, you should probably prefer them deploying their risk appetite against angel investments with a 5+ year time horizon versus weekly options on Tesla. First feels less like casino.
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My understanding is that their interest in reduction of extreme volatility really pertains only to macro-scale broad market effects. IOW, they don’t want volatility in less regulated product to influence the broader market indices. Is that accurate/reasonable?
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That is not reasonable; these asset classes are a blip next to traditional ones and appear effectively nowhere in public market indexes. (There are ways for a private startup to be partially on balance sheet of an entity in the index but it would be bps of bps of bps.)
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Government has an interest in having investors who don’t whine. Many do.
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If one looks at the volume of shareholder initiated civil cases, it’s not clear that they’re being very effective in halting whining.
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