> The great thing about capitalism is being left to carry the risk yourself.
When it comes to equity investments, and not Kickstarter-like donations, the type of disclosures that the SEC is going to require are in line with what any serious investor would want even if they weren't required. Managing risk (which is not the process of asking your gut for its opinion) requires some level of transparency.
Obviously, many investors are not sophisticated or diligent, so they won't even review the disclosures available to them, but you also have to look at equity crowdfunding from the perspective of the people raising capital. Disclosure provides them with desirable protections too. The last thing any founder needs is several hundred ignorant and/or lazy shareholders who are going to be calling up an attorney when their $1,000 investment doesn't produce the expected return, even if the expected return was completely unrealistic.
Bottom line: this notion that markets don't demand some level of disclosure and transparency without regulation is silly.
When it comes to equity investments, and not Kickstarter-like donations, the type of disclosures that the SEC is going to require are in line with what any serious investor would want even if they weren't required. Managing risk (which is not the process of asking your gut for its opinion) requires some level of transparency.
Obviously, many investors are not sophisticated or diligent, so they won't even review the disclosures available to them, but you also have to look at equity crowdfunding from the perspective of the people raising capital. Disclosure provides them with desirable protections too. The last thing any founder needs is several hundred ignorant and/or lazy shareholders who are going to be calling up an attorney when their $1,000 investment doesn't produce the expected return, even if the expected return was completely unrealistic.
Bottom line: this notion that markets don't demand some level of disclosure and transparency without regulation is silly.