On the other hand, I imagine it'd be possible to put together a well-sanctioned group of accredited angel investors that would be able to do like a "YC round two financing" if need be. It'd be pretty interesting.
You could get around accredited investor rule by having the founder form a contract with each investor. "Whatever profit and earnings I make from startup A, you have xx% up until the year 20xx." In this way, there is no interference in the startup's balance sheet, although there should be some indication of a cash injection by the founder due to their relationship with the hackers.
It really does make sense for hackers to support each other in this way.
The side effect of this law intended to protect people is that the average person can no longer participate in the highest growth sectors of the market. The rich get richer, and the poor don't have as much choice in their investments (and once a company has gone public, its astronomical growth is probably over; it's very rare for a company to be as successful as GOOG or AAPL, and even those, if you'd owned stock pre-IPO, you'd be incredibly wealthy today).
I would love to be able to invest in some of the YC companies, other than my own, but I don't have that ability yet. But, the first few rounds of YC companies have produced some accredited investors already, so the circle of available investors who "get YC" is getting wider.
You could get a personal loan from friends and family, and then roll the money into the business, but you can't sell shares without dealing with the extra paperwork and liability.
This must be Deja Vu, I remember having a conversation with you about Barack Obama after his election win in a thread where I lost over 60 points.
-- I wonder how bpick is able to invest legally in this case, because I don't think he fits with the accredited status but is still looking for investments.
I don't recall a conversation about Barack Obama, but I talk a lot, and I don't remember everything I say, so it could have happened. Anyway, I think it'd be a great reform of our investment law, if normal people could buy stock in small companies, without all the hoops and craziness required. This is particularly true now that IPOs are so much less common; it takes years before normal folks have the right to invest in a new company. SOX has eaten up even more of the extremely rapid growth curve of new companies, from the perspective of regular people.