by Mike Masnick
Wed, Feb 27th 2008 7:53pm
A few weeks ago, we discussed why the idea of a P2P venture capital firm didn't make much sense. Having lots of people invest is the same thing as going public -- and doing that requires complying with all sorts of SEC regulations. Simply opening up shop and asking lots of people to invest is bound to cause problems. Apparently, that's not stopping some folks. Wired has an article about how the founder of Powerset (the massively hyped up search engine startup that hasn't even launched yet) has moved on to try to start a new venture capital firm that would take small investments from many people and use those funds to invest in "greentech" investments. This is a little different than the P2P VC firm that we talked about, and actually seems to resemble something from the dot com bubble: a company called meVC, that allowed the public to invest money, which was then invested in startups. Of course, the folks at meVC at least realized that soliciting funds from the public meant going public itself first, so as not to run afoul of SEC regulations. Even then, things didn't work out so well. From the sound of things, it's not clear that the guy behind this new effort even realizes that, as described, the fund itself is probably very much in violation of SEC rules, but I'm sure the SEC will be kind enough to inform him pretty quickly if he moves forward with those plans.
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