Venture Capital Equality
November 11, 2021
I believe more people should be able to invest in venture capital. Investing in the companies of the future is high-risk, but can have great returns. Moreover, it's quite different from many of the assets that people normally invest in, like public companies and real estate, so you have another basket to put some eggs in. However, many of the funds are not rigged for investment from the average investor. Getting into the best funds is typically hard, and nearly impossible for people who are not a) very rich or b) rich and have a strong connection to the ecosystem (for example, successful ex-founders). Also, regulatory barriers make it complicated to cater to this group, too.
It makes more sense to take risk early in life. Also, younger people are typically willing to take more risk. If high-risk investments are closed off to people who aren't in the top 1% or 0.1% (which typically isn't the young, but they may get there later in life) in terms of wealth, upward mobility decreases, because making smart high-risk investments is a good way to increase your wealth.
Yes, venture capital is another type of asset class than people ordinarily invest in. You lock up your money for a long time because startups need time to grow. I believe that people can comprehend that before they decide to invest.
Crowdfunding, of course, is increasing. Compared to venture capital investment, however, crowdfunding is tiny. Another trend is DAOs and similar, but this is minuscule now, and even more foreign to most people.
If people want to put their money to work and invest in the future, they shouldn't be closed off from that.