Tuesday, July 5, 2011

We need Angel Investing/Venture Capital instead of Share Trading

So many analysts are wasting their time on Stock Analysis and misguiding general public. They are just trying to grow trading volume so that Financial Services community (Fund manager, Trading companies, Analysts firms) makes money and general public loose out. This is a Win-Lose scenario.






Let me suggest a win-win scenario. A platform is badly needed so that common people can invest some of their money in new companies, startups etc. These New Companies new Venture Capital money and sometimes good ideas die just due to lack of Venture Capital funding. Today common men(say having investable capital less than one million or so) cannot participate in Venture/Angel funding – government rules prohibit that. Also common people probably do not have enough competence to do the due diligence before investing in new venture. Why can’t we relax the rules of Venture capital funds where anyone can invest with their small amount of money. Government should allow this as they are investing agreeing that it is a high risk-high return investment and they can lose money(it is anyway true for a stock after IPO).






If this is allowed we will see Financial Analysts will get some interesting job to do(rather than suggesting Buy on stock today and then recommending ‘Sell’ after a month)which will actually help the economy to boom. Prudent investors will get an opportunity to invest and benefit in the early growth of a company and new entrepreneurs will get enough funding to pursue their dreams. They will get much more options to ask for money than they get today.


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