Fact: Thanks to the new crowdfunding legislation, it will soon be easier for any entrepreneur trying to build Instagram for Cats to raise $10 million than it is for an experienced investor to raise a fund to invest in the next 25 new businesses as well as support their growth with strategic advice, help with hiring, PR, business development, and connections to future capital.
In fact, thanks to increased scrutiny of investment funds in a post-Madoff world, this imbalance will probably get bigger and bigger. The laws are written seemingly with the view that it's worse to lose your money from fraud than it is from your run of the mill poorly exacuted bad idea. You know, because sometimes startups just simply don't make it (shrug) but you gotta watch out for those financial hucksters who are looking to take your money and run off to kick it in Fiji. Trust me, if you lose all your money on your brother-in-law's Arizona tanning salon, it's not going to hurt any less than if you lose it in his seed fund. (Hmm... tanning salon/seed fund combo... Jersey Shore Ventures anyone?)
To read the full, original article click on this link: - Thisisgoingtobebig.com - The Screwy Logic of Crowdfunding and Venture Fund Regulation
