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Ask HN Startup Idea

1 pointlambdom7 comments

A website where you can browse between startup seeking money and have the possibility to fund them yourself. For instance, startup X might need 50 000$ . You could give them from 1$ to 50 000$ if you think the startup would be a success. Of course, there would be a way to give back the money if the startup is really a success. It might be a part of the company (such as 50 000$ = 5%), or a simple: 1$ now will worth (1$ + x) in 1 year.

Does is already exist?

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Look up the term accredited investors and why you would only want them investing. Here I'll help you out:

http://en.wikipedia.org/wiki/Accredited_investor

http://thestartuplawyer.com/convertible-notes/life-is-too-sh...

Is there a possibility of creating a pool of non-accredited investors that solve the problems pointed out by the second article?

Wouldn't this quickly run afoul of the SEC? Is this money to be considered equity, a loan, or what? There are many laws to trip over here, especially Federal. I know if I gave such a startup, say, $1,000 and it became huge, I wouldn't want only $1,000 repaid! I'd see myself as an investor for equity and that would invoke the laws governing stocks right there.

It would be cristal clear before you pay the $1,000 what will happend with that money if the company is succesful and how much you would get.

Yeah, it's a shame. The guys over at http://scalewell.com looked into this and it was pretty much impossible to do it legally. So, they're just giving away the money instead.

I think it is a neat idea and I have not seen such an app yet.The idea can be called micro-investing or micro-entrepreneur.

What would be the business model of the company facilitating this transaction (the startup)? Commission on transaction or commission on profits or both?

this exists in the form of kickstarter.com, I think as others have mentioned the legalities of investing make the actual investment quite hard, kickstarter is closer to a charity but with the opportunity for startups to give really good incentives to put money forward

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