Revisiting Paul Graham’s “High Resolution” Financing

First of all, $10,000 is not enough money to justify giving away equity in any company with reasonable prospects, especially since issuing the equity costs money over time. This is the same problem with the Twilio fund (they should just offer free service to pre-revenue start-ups).

Second, assuming the major value of social proof is the assurance it provides later investors that people they respect see the risk-return ratio as favorable enough to risk their own capital, this will accomplish nothing but shift the equilibrium towards smaller rounds for entrepreneurs while demands for social proof will shift correspondingly ("But who else has invested $50,000....").

I respect Mark's investing in small business. But as a single founder with a bootstrapped business (outside SV), I'd chalk up someone who even suggested this as just trying to exploit me. I do think it's a good idea for investors to get compensation for effort put into organizing rounds. But the founder-friendly arrangement is performance based though, not "giving a good deal to investors [who founders] expect to help them [sometime in the future]".