This episode discusses the appetite for equity crowdfunding among the 96% of Americans who are not accredited investors, and the potential changes in accreditation laws by the SEC. The guest speaker also highlights the importance of small investments to fund startups compared to larger investments in crypto that can lead to bigger financial holes.
The podcast hosts discuss the difference between public and private companies in terms of their disclosure rules and how it affected GameStop's situation with Wall Street bets. The SEC forced disclosure of funds allowed for a better understanding of GameStop's long and short book.
Learn about how you can earn interest on your cryptocurrency with exchanges like BlockFi and Gemini, compared to platforms like Robinhood and PayPal that do not offer interest.
The current system of capital formation requires trust from investors for businesses to make investments in infrastructure and hire people. If people believe in the market and that it is not a casino, capital formation can improve, which will help fund the SEC to regulate the industry.
Sequoia refused to participate in a pay to play around for Company Citizen which led to a 10 to one share decrease for those who did not invest, a move typically not done by VC firms when they leave a company's board.
The option to sell customer contracts rather than equity shares for funding is an innovative way for companies to gain capital without dilution. Companies such as Carta offer a platform for SaaS companies to join where customer contracts can be sold for cash upfront.