In classic Milo fashion, Mr Yiannopoulos has just published a scathing attack on new crowdfunding site Seedrs, with the rather unfriendly title “Are you an idiot? Seedrs wants to hear from you”. Quoting some juicy bits:
The report makes it clear: when highly-skilled entrepreneurs invest in a balanced portfolio of start-ups, 40 per cent of them lose money overall. Dare we even ask what the figure looks like for amateurs with no experience of tech start-ups? And, not to be discourteous, but do Seedrs investors appreciate the likely ramifications of having their investments curated by former lawyers, corporate governance bods, IT consultants and marketing executives?
Seedrs itself isn’t a bad business: it creams off a whopping 7.5 per cent of any money successfully raising on the platform – and takes the same percentage from any returns. But while start-ups are getting a new funnel of dumb money and Lynn is making some very tidy fees, the poor bastards who have watched Pebble from afar in awe (and who now, taken in by Tech City’s bluster and bullshit about east London start-ups and anxious for a quick slice of the pie, are anxious to chuck their savings into execrable internet projects) are about to lose their savings.
As an amateur with a bit of extra cash to hand, you’ll get more bang for your buck lighting up your Cubans with hundred dollar bills than logging on to Seedrs. You have been warned.
Well, well. I wonder how the boys and girls at Seedrs HQ sleep at night, the evil scum!
Or perhaps this attack is just a little bit unfair. Would Milo perhaps like to take aims at the London Stock Exchange and its associated brokers, IG Index, City Index, SpreadEx, and so on. They’re also largely open to the public, and unlike Seedrs, which is only just launched, they’ve been parting fools and their money for over a decade.
I just went through the Seedrs signup process as an investor, to see what it’s like, and at every step of the way I was besieged by disclaimers that I had to dutifully check off, making it abundantly clear that most startups fail, that I’d probably lose any money invested, that I could get diluted, that I probably wouldn’t receive dividends, and so on. Then, Seedrs forced me to declare my total assets – and immediately capped the amount I can invest to 20% of that.
The process also involved a questionnaire to gauge my knowledge of the startup world. I had no problem answering it correctly, of course, because I do know the startup world rather well, so I don’t know what happens if you fail it, but the site did specify that you could only submit the questionnaire once. I have a funny feeling that if you fail to answer it perfectly, Seedrs won’t let you invest (they should do that, if they don’t).
There are, of course, ways around all these barriers (create multiple accounts until you get the questionnaire right?). However, much like a bridge builder can’t be blamed for people who climb over a tall fence to throw themselves in the river, it’s not really fair to blame Seedrs for the fools that undoubtedly will blissfully go through this process, removing every safeguard.
Declaring that Seedrs explicitly requires idiots in order to be successful is disingenuous. They do their best to turn fools away, and put in safeguards to try and stop you from screwing yourself. If you carefully and conscientiously remove those safeguards, you only have yourself to blame.
Is Milo really advocating a nanny state approach to investment, where people are not allowed to take known risks? I don’t think so, somehow.
So, are there risks to investing via Seedrs? For sure. Is Seedrs explicitly trying to leverage idiocy to make money at the expense of fools? I don’t think Milo has made a case for that at all.