The New York Times came out with an article yesterday that caused me to seriously question the publicationâ€™s true allegiance. The piece, written by Andrew Ross Sorkin and titled, â€œJOBS Act Jeopardizes Safety Net For Investorsâ€, uses Grouponâ€™s current woes as an excuse to denounce the overwhelmingly bipartisan jobs bill just days before Obama is expected to sign it into law.
His title alone makes me cringe. Since when does investing come with safety nets? Investing involves risk. In fact, the entire concept of investing is weighing risk versus reward. Mr. Sorkin, do you even comprehend the magnitude of what your article intimated? You are basically insinuated that it should be the Governmentâ€™s responsibility to assure investment returns. Somewhere, Ayn Rand is rolling over in her grave.
Letâ€™s get one thing straight, I am all for investor protections. But unlike you, Mr. Sorkin, I also support a capital markets system that provides fairness to ALL investors, not just to the 1%. I further endorse a bill that allows for investor protections without sacrificing our nationâ€™s greatest innovators. For far too long our capital markets have been hijacked by PIPE funds, program traders and a handful of supersized investment banking and institutional firms at the expense of our small businesses. The JOBS Act democratizes our capital markets, brings equality to retail investors as well as emerging companies, and most importantly, it hands the capital markets back to the 99%.
The â€œCrowdfundingâ€ component of the bill that you condemn actually levels the investment playing field by permitting smaller investors to invest prior to a companyâ€™s greatest growth spurt as opposed to having to wait until its IPO when the majority of the appreciation had long passed. Why do you take issue with the 99% being afforded the same opportunities to grow their money as the 1%?
Since you obviously lack an understanding of crowdfunding, allow me to educate you. The Crowdfunding Marketplace could not be more distinct from the unbalanced conventional markets you outwardly shield from crucial regulatory reform.
Unlike most public market investors, crowdfund investors are long term, benevolent shareholders who invest in a company, not because they have a â€œget rich quickâ€ mentality, but because they truly appreciate a companyâ€™s business, its mission, its value to the community and its potential impact on society. In fact, crowdfunders value a companyâ€™s business so much that they are currently funding projects without even receiving an equity stake. Imagine a PIPE investor forgoing his equity because his true motive is to see the company succeed? I canâ€™t even envision him not securing his return by demanding a steep discount plus a warrant kicker for â€œriskingâ€ his capital.
Crowdfunding allows businesses to obtain shareholders whose interests are more aligned with their own. This alliance gives companies a greater chance to succeed. If crowdfunding achieves nothing else but altering investing behaviors and making it â€œchicâ€ to be a long term shareholder again, it will go a long way towards improving our capital markets, our economic future and even advancing society as a whole.
Finally, Mr. Sorkin, please understand that if you regulate the risk out of our capital markets, you will be regulating our nation right out of innovation, growth, global competitiveness and yes, job creation. Not every company will succeed. In fact, many will not. But our capital markets were built on the back of many failures as well as successes. Had it not been for those failures, there might never have been an Apple, Intel, Microsoft, Google or a Facebook and you would have written your irresponsible propaganda cloaked as journalism with a fountain pen instead of on a keyboard.
The New York Times needs to stop decapitalizing the markets under the pretense of investor fairness when their actions will only lead to greater injustice. If it truly wants this nation to prosper, it will put an end to encouraging mediocrity and dependency through careless rhetoric of unwarranted safety nets.