Author Topic: Invest Your Money With Friends, Athletes, and Complete Strangers!  (Read 2380 times)

Kaspian

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This is definitely required reading, "The Age of Bullshit Investments Is Back!" (http://nymag.com/daily/intelligencer/2013/10/crazy-investment-time-again.html) .  Some of the things people are flocking to as "investments" aren't even risky, they're downright scary and insane.  I checked out AngelList and why on earth (err.. Heaven?) would you throw money to someone (the site calls them "syndicates"--a term I relate more to criminal gangs than s sound investment) who doesn't even have a proper prospectus, financial details, or coherent business plan?  ...Yep, because they're a popular person on Twitter and need money for an vague, undefined startup.  That's as good a reason as any to give them $5K, right?  The amount of money going through that site is terrifying.

oldtoyota

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Re: Invest Your Money With Friends, Athletes, and Complete Strangers!
« Reply #1 on: November 03, 2013, 05:39:55 PM »
I watched a show called American Greed a few times over the past month. The story centers around one or more people (different each time) who invest money with a criminal, lose the money, and then talk about it.

What surprises me is that people invest money with people they think are nice. I am going to keep investing with large and reputable institutions--not some guy I met at a cocktail party.

« Last Edit: November 04, 2013, 08:50:44 AM by oldtoyota »

Nords

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Re: Invest Your Money With Friends, Athletes, and Complete Strangers!
« Reply #2 on: November 04, 2013, 08:35:00 AM »
This is definitely required reading, "The Age of Bullshit Investments Is Back!" (http://nymag.com/daily/intelligencer/2013/10/crazy-investment-time-again.html) .  Some of the things people are flocking to as "investments" aren't even risky, they're downright scary and insane.  I checked out AngelList and why on earth (err.. Heaven?) would you throw money to someone (the site calls them "syndicates"--a term I relate more to criminal gangs than s sound investment) who doesn't even have a proper prospectus, financial details, or coherent business plan?  ...Yep, because they're a popular person on Twitter and need money for an vague, undefined startup.  That's as good a reason as any to give them $5K, right?  The amount of money going through that site is terrifying.
These investments have always been available to accredited investors, as AngelList has been doing for several years now.

What's new is that the SEC is loosening the rules for those who are not (yet) accredited investors, and AngelList has hopped on the trend by making it easier for startups to work with syndicates of their investor members.  It also makes it a lot easier for the investors to coordinate their due diligence.

I've only seen a startup with a prospectus when they go IPO, and until then the best you'd get is a list of disclosures. 

Startup financial details are mainly wishful thinking because if they had financial details then they might not need your investment in the first place.  About the only time a startup with revenues wants investment money is when they're trying to grow the business faster, but even then their growth projections are generally just a more sophisticated version of wishful thinking.   

"Coherent business plan":  whenever you see one of those from a startup it's a sign that the founders have no financial clue and have been wasting hours plugging imaginary numbers and phrases into a Word/Excel template.  A startup's business plan should fit on one page, and might even fit on a single PowerPoint slide.

The site is a conduit for a terrifying amount of money, but there is some profit there. 

For everyone else, there's always Kickstarter and IndieGoGo!