I was actually looking at doing something like this about a year ago, before I figured it was virtually impossible at the time. The idea did come out to me after seeing kickstarter a couple of times. I even remember that one of the names I was playing with was Bootstrap.it or something similar. My logic went along the same lines as your edit. People would not only be able to donate monetary funds, but then each company would have access to a network of different individuals, some of whom would be willing to help out with advice, or maybe if one was a lawyer, he'd help them get incorporated, that kind of stuff.
Essentially it's because of SEC. First of all you have (had) the 500 limit for investors, so any fundraiser where only, let's say 400 people, could give money would be rather shitty.
Then the other part was that if you wanted to invest in early stage startups, you have to be an accredited investor. That is you have to either make 200K a year for the last two years (or 300K together with a spouse) or have $1 million in the bank. So again, not too many people fill those requirements.
In terms of companies that were still attempting this, http://www.profounder.com/ is one of the bigger ones. They (sort of) made it work through some loopholes as far as I knew.
I find it somewhat ironic that the same people who denounce the recent Instagram investment as an insider deal for a few priviledged people in the know tend to be the same people who oppose the democratization of angel investing.
unimpressive|14 years ago
But that was part of the recent JOBS act. You'll be able to do that soon for good or ill.
sage_joch|14 years ago
alexsb92|14 years ago
Essentially it's because of SEC. First of all you have (had) the 500 limit for investors, so any fundraiser where only, let's say 400 people, could give money would be rather shitty.
Then the other part was that if you wanted to invest in early stage startups, you have to be an accredited investor. That is you have to either make 200K a year for the last two years (or 300K together with a spouse) or have $1 million in the bank. So again, not too many people fill those requirements.
In terms of companies that were still attempting this, http://www.profounder.com/ is one of the bigger ones. They (sort of) made it work through some loopholes as far as I knew.
olalonde|14 years ago
ryanmerket|14 years ago