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Comment by vegashacker | Hacker News Reader

I agree Sam may be in an especially good position to make guesses about the future of companies, but that doesn't explain where the investment money comes from.

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Founders can cash out at various funding rounds, so it might be that Sam took some money out during Loopt's funding rounds.

I'm assuming the same for Kevin Rose who's a pretty active angel.

Likely the sums invested are fairly small as well.

The Foursquare guys took $4M home out of a current funding round

http://www.theequitykicker.com/2010/07/15/foursquare-founder...

Also, to be an accredited investor, don't you need a net worth of like $1 million? So having 50k lying around doesn't cut it. Although there might be exceptions to that rule... I'm definitely no expert on the subject.

Here are the rules for being an accredited investor: http://www.sec.gov/answers/accred.htm

"income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year"

And it is not like you have to submit to an audit to the company before sending them a check -- all you have to do is sign something that says you are accredited. That way you will have a harder time suing the company claiming you were mis-led or whatever.

Thanks for looking that up. Looks like it's not terribly difficult to qualify.

"Net worth" does not mean liquid. Sam's equity in Loopt is easily worth more than $1MM.

it may have been a relatively small amount -- like $20k to $50k -- all the investors listed only invested $1MM in total

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