<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>jakelazaroff</author><text>&lt;i&gt;&amp;gt; They&amp;#x27;re prevented from investing in the good ones, too. You say that the casino will pay your unlikely winnings, but the thing about casinos is that unless you actually have an edge, the more you gamble, the more you lose. The vast majority of games have odds that result in the house making a profit over time.&lt;/i&gt;&lt;p&gt;What do you think is the expected return of investing in a private company? I don&amp;#x27;t have data to back this up, but I&amp;#x27;d bet it&amp;#x27;s negative — especially if you hold common stock, or whatever non-preferred equity retail investors would get.&lt;p&gt;And if, on top of that, we relaxed the guard rails preventing people from being scammed? I think the odds would be much worse than you&amp;#x27;d find in a casino.</text><parent_chain><item><author>ksdale</author><text>That&amp;#x27;s what the story about, but non-accredited investors aren&amp;#x27;t only prevented from investing in those particular companies. They&amp;#x27;re prevented from investing in the good ones, too. You say that the casino will pay your unlikely winnings, but the thing about casinos is that unless you actually have an edge, the more you gamble, the more you lose. The vast majority of games have odds that result in the house making a profit over time. And yet we&amp;#x27;re allowed to spend our money freely in casinos.&lt;p&gt;There are all sorts of penalties for bad behavior on behalf of companies. Of course, that doesn&amp;#x27;t guarantee they&amp;#x27;ll make money, but I think it&amp;#x27;s a very valid point that we&amp;#x27;re allowed to waste our money on all sorts of dumb bullshit, but not on something like investing in startups, which at least has a &lt;i&gt;possibility&lt;/i&gt;, however remote, of resulting in some sort of return.</text></item><item><author>robotresearcher</author><text>I understand. But there are strong feedback mechanisms in place so that a casino will actually pay your (unlikely) winnings and a surgeon will actually cat your face, which have to do with scrutiny, penalties for bad behavior, and the cost of entering a highly regulated market requiring lots of customers to recoup. They provide the service they claim.&lt;p&gt;The story is about companies whose business model is simply to take investment money. They do not try to provide the service they claim.</text></item><item><author>pg_bot</author><text>I wasn&amp;#x27;t talking about starting a casino or surgery center. I was talking about playing roulette or turning yourself into a human cat hybrid.</text></item><item><author>robotresearcher</author><text>You can&amp;#x27;t enter the gambling, surgery and stock markets with naught but a Keynote deck.</text></item><item><author>pg_bot</author><text>It always seemed a bit nonsensical to me that you can&amp;#x27;t invest in companies (in the USA) when you can spend your money freely in nearly every other respect. You can waste thousands on gambling, food, clothing, elective surgery, penny stocks, and all sorts of other activities without anyone batting an eyelid. If the goal is to stop idiots from pissing their money away, regulators have seriously underestimated the creativity of fools.</text></item><item><author>pavlov</author><text>&lt;i&gt;&amp;gt; &amp;quot;While the investors listed above can take care of themselves, unfortunately, invitations to invest were also extended to small-time individual angel investors. Thousands of AngelList members were invited to invest personal checks ranging from $2,000 to $20,000+ via the mailing lists of multiple syndicates.&amp;quot;&lt;/i&gt;&lt;p&gt;It&amp;#x27;s worth noting that any US person investing this way is required to be an accredited investor, which is another way of saying they&amp;#x27;ve proven they can afford to lose that $20k (or whatever they&amp;#x27;re putting in).&lt;p&gt;The accredited investor rules in USA seem draconian, but if it weren&amp;#x27;t for them, we&amp;#x27;d be absolutely drowning in fake tech companies taking money from retail investors. (Today those fakes are in crypto, where you can pretend your investment offering is a utility token or maybe a donation to a revolutionary DAO that just happens to issue tradeable crypto-tokens in return, and hide behind pseudonyms to make it harder for SEC to find you eventually.)</text></item></parent_chain></comment><story><title>Can a $310M startup avoid due diligence?</title><url>https://svgossip.substack.com/p/can-a-310m-startup-avoid-due-diligence</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>notahacker</author><text>&amp;gt; we&amp;#x27;re allowed to waste our money on all sorts of dumb bullshit, but not on something like investing in startups, which at least has a possibility, however remote, of resulting in some sort of return&lt;p&gt;A lower possibility than the casinos or lotteries, if we&amp;#x27;re talking retail investment in early stage startup pitches you have no affiliation with. The reluctance of everybody to acknowledge this is the reason the law exist. Most people walk out of casinos having lost some of their money. Most retail investors in random business propositions will never see any of that money again.</text><parent_chain><item><author>ksdale</author><text>That&amp;#x27;s what the story about, but non-accredited investors aren&amp;#x27;t only prevented from investing in those particular companies. They&amp;#x27;re prevented from investing in the good ones, too. You say that the casino will pay your unlikely winnings, but the thing about casinos is that unless you actually have an edge, the more you gamble, the more you lose. The vast majority of games have odds that result in the house making a profit over time. And yet we&amp;#x27;re allowed to spend our money freely in casinos.&lt;p&gt;There are all sorts of penalties for bad behavior on behalf of companies. Of course, that doesn&amp;#x27;t guarantee they&amp;#x27;ll make money, but I think it&amp;#x27;s a very valid point that we&amp;#x27;re allowed to waste our money on all sorts of dumb bullshit, but not on something like investing in startups, which at least has a &lt;i&gt;possibility&lt;/i&gt;, however remote, of resulting in some sort of return.</text></item><item><author>robotresearcher</author><text>I understand. But there are strong feedback mechanisms in place so that a casino will actually pay your (unlikely) winnings and a surgeon will actually cat your face, which have to do with scrutiny, penalties for bad behavior, and the cost of entering a highly regulated market requiring lots of customers to recoup. They provide the service they claim.&lt;p&gt;The story is about companies whose business model is simply to take investment money. They do not try to provide the service they claim.</text></item><item><author>pg_bot</author><text>I wasn&amp;#x27;t talking about starting a casino or surgery center. I was talking about playing roulette or turning yourself into a human cat hybrid.</text></item><item><author>robotresearcher</author><text>You can&amp;#x27;t enter the gambling, surgery and stock markets with naught but a Keynote deck.</text></item><item><author>pg_bot</author><text>It always seemed a bit nonsensical to me that you can&amp;#x27;t invest in companies (in the USA) when you can spend your money freely in nearly every other respect. You can waste thousands on gambling, food, clothing, elective surgery, penny stocks, and all sorts of other activities without anyone batting an eyelid. If the goal is to stop idiots from pissing their money away, regulators have seriously underestimated the creativity of fools.</text></item><item><author>pavlov</author><text>&lt;i&gt;&amp;gt; &amp;quot;While the investors listed above can take care of themselves, unfortunately, invitations to invest were also extended to small-time individual angel investors. Thousands of AngelList members were invited to invest personal checks ranging from $2,000 to $20,000+ via the mailing lists of multiple syndicates.&amp;quot;&lt;/i&gt;&lt;p&gt;It&amp;#x27;s worth noting that any US person investing this way is required to be an accredited investor, which is another way of saying they&amp;#x27;ve proven they can afford to lose that $20k (or whatever they&amp;#x27;re putting in).&lt;p&gt;The accredited investor rules in USA seem draconian, but if it weren&amp;#x27;t for them, we&amp;#x27;d be absolutely drowning in fake tech companies taking money from retail investors. (Today those fakes are in crypto, where you can pretend your investment offering is a utility token or maybe a donation to a revolutionary DAO that just happens to issue tradeable crypto-tokens in return, and hide behind pseudonyms to make it harder for SEC to find you eventually.)</text></item></parent_chain></comment><story><title>Can a $310M startup avoid due diligence?</title><url>https://svgossip.substack.com/p/can-a-310m-startup-avoid-due-diligence</url></story>