I thought the whole deal with startup investing was: Invest in a few dozen companies and hope you get one hit so big it makes up for all the others, which you expect to all go down in flames.
That can work if you have millions to spend and the time, connections, and access to pal around with dozens of founders, looking for the good eggs. For a "small investor" who has a small fraction of a middle-class paycheck to spend and access only to the web, it would just be the most boring form of gambling ever invented.
Who "expected" a crowd of small investors for this, exactly?
My hope for crowdfunding would be that it would be exactly like you describe: spend the time, connections, and pal around with people doing projects, but the only difference would be the dollar amounts. $1,000 here, $10,000 there, on things like performances, food carts, etc. Stuff a VC would never touch because the max payout is like $50k.
But for a small investor to make 10 ~$5k investments, and get back principal plus $50k over the course of a few years that's pretty good. And they can do it in their own community on projects that don't make sense for someone in New York or SV to even know about.
Bloomberg, apparently. It's just like day trading: sure, you might get lucky, but you have to know or have something the rest of us don't to get consistent returns. Just invest in an index fund.
That can work if you have millions to spend and the time, connections, and access to pal around with dozens of founders, looking for the good eggs. For a "small investor" who has a small fraction of a middle-class paycheck to spend and access only to the web, it would just be the most boring form of gambling ever invented.
Who "expected" a crowd of small investors for this, exactly?