I can see why startups raising money benefit from an increase in the numberof potential investors and capital. But apart from this, is there a good reason to want to "democratize access to investing,” and open the field to non-accredited investors?
I share the instinctive response to a rule where "only rich people can X" but (1) Are startups such a great investment that unaccredited shlubs are substantially disadvantaged by excluion? (2) Do they have enough (risk tolerant) money to make a difference? (3) Will companies financed these ways be better in some way.
If we assume the bigger fraud-ish problems get solved, what is the big upside?
I can vaguely see an argument for something between kickstarter/patreon & NASDAQ enabling new kinds of things, but is there really something here. To put it more generally, why should people other than Sam Altman agree with him?
I'd say the biggest problem is "fraud". Once you make it accessible for the average person to invest and the sophisticated fraudster to advertise and raise money, what you get is ... ICOs.
IPOs do have fraud but at least it is controlled a lot. To raise capital you need to be a specific person/company and you have a set of responsibility toward your investors.
Financially, having the option to do X has a certain value, even if on average X isn't valuable. (If X has volatility)
Startups has a certain risk characteristic that is different that what you can find on the public equity market. Theoretically, an efficient market should dish out higher reward to compensate for higher risk and poor liquidity of investing in startups. It may be beneficial to individuals to use startups to diversify their overall portfolio.
Startups in general might not be a great investment. The subset of all YC startups might be.
Researching and investing in startups is fun and educational.
I share the instinctive response to a rule where "only rich people can X" but (1) Are startups such a great investment that unaccredited shlubs are substantially disadvantaged by excluion? (2) Do they have enough (risk tolerant) money to make a difference? (3) Will companies financed these ways be better in some way.
If we assume the bigger fraud-ish problems get solved, what is the big upside?
I can vaguely see an argument for something between kickstarter/patreon & NASDAQ enabling new kinds of things, but is there really something here. To put it more generally, why should people other than Sam Altman agree with him?