Mathew's comments - Latest Comments in Twitter: A micro-financing vehicle?

Re: Twitter: A micro-financing vehicle?

IMFM2 — Sat, 18 Oct 2008 23:44:00 -0000

The system and the GOV is there to protect the special interest, not individuals as the GOV and the SEC and FINRA have claimed.

If Jason is allow to do what he proposed to do, all the institutions, VC, IB would be out of business. Also, there would be no need for the GOV grant system too because it takes the GOV FOREVER to hand out grants to business in need. Plus, business financing is not mean for everyone or all the banks would be out of business too.

I agreed that SEC and FINRA should make such changes and allow non-accredited investors to decide for ourselves on "micro investments" without all the GOV scrutiny and red tapes.

Of course, there are ways to go around the SEC because Jason's post on twitter only violated two areas.

1) advertise in public

2) Without qualifying investors

Thus, Jason can very well host an online seminar without accepting investment money and to build "existing relationship with potential investors, FIRST. By doing so. Jason is relieved of its first violation of advertising in public.

Also, its not difficult to find 5000 accredited investors online, as we have over 25 million accredited investors in the US alone. So 5000 isn't too difficult.

Also, if Jason change his post a bit by stating below:

Seeking individual/ private lenders! $100/ Lender rather than investor.

Then, Jason should be on his way to achieve his objective.

We believed in Investment Money From Majority For Majority (IMFM2)

Good luck Jason

Re: Twitter: A micro-financing vehicle?

mathewi — Thu, 21 Aug 2008 15:08:21 -0000

Looking forward to it, Michael.

Re: Twitter: A micro-financing vehicle?

Michael Garrity — Thu, 21 Aug 2008 14:59:10 -0000

Hey Mathew - I saw this string at TechCrunch yesterday and thought of wading in to illuminate the issue as it relates to "social lending" in general but thought the US nature of the discussion wasn't relevant. Now that you have has brought the issue home though, I'll wade in. At CommunityLend, we know this issue PARTICULARLY well as it is one of the central defining issues in launching a social lending service in Canada. Rest assured, there are ways of still using social networks for collecting people around financial requests that stays within the heavy constraints of Canadian law (as we will demonstrate in our planned launch in the next couple of months) - it's just VERY complicated. I take it we can count on you as an early user. : )

Re: Twitter: A micro-financing vehicle?

James Sherrett — Thu, 21 Aug 2008 10:26:35 -0000

Re: "Why couldn’t someone “crowd-source” a financing for a startup?"

I think the barrier is more human than anything, although it sounds like there are legal hurdles as well. Crowdsourced financing would create 2 problems:
1. The company would likely have a huge number of relationships with investors to update and manage. That sounds hard.
2. It's pretty hard to establish 'money trust' (high level trust that must endure difficulties over a number of years) through a web page, twitter message, etc.

That's my perspective, as the CEO of a startup company (AdHack) that just launched our beta and is now preparing to go to the market to raise funding. I've played with the idea of crowdsourcing and it just doesn't feel right.

Re: Twitter: A micro-financing vehicle?

mathewi — Thu, 21 Aug 2008 09:14:09 -0000

Good luck, Brad.

Re: Twitter: A micro-financing vehicle?

clickbrain — Thu, 21 Aug 2008 08:56:07 -0000

We are going to give it a run and bounce around some ideas on how to accomplish this without legislation.

http://friendfeed.com/rooms/microvc

Re: Twitter: A micro-financing vehicle?

profy — Thu, 21 Aug 2008 04:28:18 -0000

Interesting idea Mathew. I don't really think the legislation can be changed so easily but it's not impossible for a special product to be launched to address this particular issue and allow for micro-financing via social networks within the limits of the existing legislation.