Financing Investment In A World Without Maturity Transformation
macroresilience.com
macroresilience.com
In other words, "I have nothing against kickstarter, but it is insane to allow kickstarter to exist as it is". Contradiction alert!
> Almost all the criticisms of capitalism are derived from the pathologies of institutional fiduciary capitalism.
Having read on and discussed the topic extensively, I'd say that "almost all" is completely unjustified.
> However we can do better than allowing individuals to donate money on a hope and a prayer.
Odd seeing such a claim from a self-confessed supporter of capitalism.
> If we want capitalism to become less selfish, we need to enable each individual to become a capitalist.
Does he mean like owners of capital assets doing what they wish with it, as long as it doesn't infringe on the rights of others?
This retains most of your words, but what you find insane is less ambiguous now.
An investment is not supposed to be a permanent and total loss of capital. On the contrary, the intent is to get more out than you put in. People depend on their investments for their financial futures. And there is a well-documented history of vast numbers of people losing everything to bad investments, especially investments pushed by scam artists from the small to the very large (like Madoff and Stanford).
But when I act as a fiduciary responsible for investing someone else's money, I have to maximise economic return by law.
By allowing the masses to invest in small businesses, we obviously allow them to participate in the economic returns from these businesses. But we also allow them to express their more charitable altruistic goals within a well-developed framework where they can be more confident that their money is being put to good use. If nothing else, as an owner I am entitled to receive regular audited financial reports.
No, you don't! That you say this just highlights how uninformed and unqualified you are to have written this article.
First, serious writers don't need to bold their punch-line sentences so you know that they're punchline sentences.
Second, showing low P2P lending rates in a tiny market during a period when lending rates are generally in the toilet does not "disprove" the need for banks.
There are ETFs today that anybody can buy that will only give complete information to "accredited investors". That doesn't protect consumers.
I mean, you still need middle men. Nobody has willing, knowledge or time to rate, follow and persecute a bunch of SME's.
I would love laws and tools to lend to companies I know well although. Like companies of friends or friends of friends. But that is impossible now. Another big topic is discounting invoices, somebody here? Interesting topic with real hassle.
You dont get to "persecute" anyone. Thats the risk of the investment
There must obviously be some sort of redress in the case of ouright fraud. But then, how do you distinguish malice from incompetence?
That's how the SEC got started...
Banks are crap because of regulation in a forced market: You basically have to put your money in a bank to counteract inflation, but becoming a bank is VERY difficult, so is competing with ones which will always be bailed out.
U.S. has the same issue with healthcare. Becoming a healthcare provider in the U.S. is incredibly difficult, even moreso becoming a healthcare insurer, and as such they consolidate and crapify as far as they can without making it bad enough to justify competing with them despite the regulatory barriers. Then all your drugs have to be FDA approved(which takes more than a decade at least), and many of them will be produced under one or more patents which also raise the cost of the medication.
Any takers to start up a kickstarter-clone without donation but part ownership? With pledges for more money to throw into project when it reaches a threshold and so on. Basically what we had 100 years ago with normal public stock traded companies but in a digital world.
Kickstarter is fantastic for funding things which are ready to go but just need the capital to pay for volume manufacture up front. If the product isn't ready to ship in that form & their asking for funding to get it into that state then it's much more risky. I've funded things on kickstarter which were pretty much "I'd like to print this comic / book / whatever, if I can get a bunch of pre-orders in up front then everyone wins." Kickstarter is amazing for those kind of creator-driven projects.
I didn't follow them since then. Looks like they tried to crowd-fund themselves, but failed. However, he seemed very passionate about this idea. So, I would be surprised if they'd give it up easily.
When you buy an Android or iOS phone, for example, you are helping to fund a company. You don't get ownership for that company.
By funding individuals, or small groups, I believe that most are efficiently using the funds, and you are getting products that most larger companies couldn't be bothered with.
My condition for kickstarters is some kind of open sourcing clause, so that even if the creator fails, you are still assured of some kind of partially finished product.
The least restricted market in this regards is the United Kingdom where there are quite a few businesses in the crowdfunding/peer-to-peer lending space already - for equity funding see Seedrs[1] and Crowdcube[2].There's even instances of SMEs raising equity from the public directly e.g. Brewdog[3].
The UK regulator (FCA) is just catching up so things may change next year[4].
[1]: http://www.seedrs.com/ [2]: http://www.crowdcube.com/ [3]: http://www.brewdog.com/equityforpunks [4]: http://www.reuters.com/article/2013/10/03/britain-crowdfundi...?