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Comment by tptacek | Hacker News Reader

Is it just a little disingenuous to suggest that the public is prevented from enjoying the benefit of company growth because they aren't allowed to invest in venture capital funds? They can't, of course. But they can invest in other vehicles that can.

Individual investors can't directly benefit from Facebook's appreciation the way they could Microsoft's. But their retirement fund sure can.

Meanwhile, there's probably a strong case to be made that in the large, individual investors shouldn't try to hit these kinds of home runs, because they're outgunned by institutional investors and they don't have the capacity to diversify as well as institutional investors can.

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If you can find me, a regular worker, a way to buy into Founders Fund, Union Square Ventures, a16z, etc. I'd be quite happy to hear about it.

Also, I don't know where you work, but in Canada, tech workers usually aren't awarded a retirement fund, but rather, matching contributions to an RRSP, which is an retirement savings investment account that I control. So once again I'm out of the growth investment game. I'm assuming a 401(k) works on the same basis...

You can't buy into a16z. But your pension fund can.

Let me clarify: I don't have a pension fund, and neither no most people in non-unionized jobs. My RRSP account is a personal investment account. My employer contributes to it, but I am the investment manager.

Are there many funds from Vanguard or Fidelity that are regular participants in Series D/E rounds of funding? Or do you mean that an entity like CALPERS can invest some amount in the various VC funds? In the latter case, I think its been shown that VC as an asset class (invested in that manner) significantly underperforms the public market.

Not only can pension funds like CalPERS invest in VC firms, but they do, often by design --- they have asset class requirements that militate for VC. Entities like CalPERS are actually one of the engines behind VC funds.

Many mutual funds actually bought shares of Facebook before the IPO: http://money.cnn.com/2012/05/18/markets/facebook-mutual-fund...

I think just the opposite is the case. Individuals are better poised to diversify if they can drop investments across a large number of projects with tickets in the sub $1K range.

Imagine what would happen if you could really micro-invest, $10/day in 10 different projects. You'd even have kids actually learning to invest from age 10 that could beat the "pros" by the time they are in high school.

That might work if you had most of your portfolio dedicated to early-stage companies, but that in itself is a bad investment strategy. Consider: it's the strategy behind venture capital funds, and venture capital as an asset class tends to underperform --- if you're thinking about Microsoft and Facebook but not Murpli and Foozblap, you're a victim of survivorship bias.

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