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Pros and Cons of the JOBS Bill

I'm listening to this podcast from Coffee & Markets on the subject of the JOBS Act. JOBS stands for "Jumpstart Our Business Startups", and the part that is most significant in this point is the change in rules for funding small businesses.

They do a really good job of hitting the issues, and (unlike most of their podcasts) there's a real adversarial interchange on the core, which is as follows: Kickstarter is a neat idea, and there are many interesting ideas coming out of it. I haven't made a project and I haven't funded one, but I like the idea, but the thing to remember is that you're either 1) giving money to people to do something interesting, or 2) pre-ordering from them to do something interesting. You are not an early investor, so you don't get equity, so if your $100 is what made the difference for them to become the next Google or Facebook or Valve, you get to say "I helped with that", but you don't get to live in Marin County swimming in a pool of money like Scrooge McDuck. Until now.

From the Robocop Kickstarter page
The rule that the JOBS Act is overturning dates from 1933, where the Stock Market Crash took down a lot of small investors who had heavily invested in untrustworthy companies and ended up losing it all. I am more than sure that someone will try to Bialystock & Bloom the system by come up with an idea, funding it, intentially failing and pocketing the money. Or something akin to this. You don't need me to explain all the ways a business can fail.

I'm seeing this from three sides.

The first side is as a consumer. As a consumer, I want a Pebble watch. I want Ned Evett to make album after album of fretless guitar music. I want Detroit to have a RoboCop statue. I want the world to be filled with interesting things. We live in the future and it's about time we start taking advantage of it!

The second side is as a developer. I currently work for a Big 10 university, but I am more interested and involved in seeking out side projects. We are at a state with computing that you can develop an idea cheaply and easily on inexpensive PCs and deploy them with Amazon with a credit card. Moore's Law is creating a bigger and bigger tide of computational capability which crests over the rocks of consumer interest. Lots of people are trying to surf it. Many ideas don't work, but that's a learning opportunity about how to do it better next time.

The third side is as a citizen. As a citizen, I look at this and see a definite non-zero chance of people being screwed by this.

So, I'm largely but not wholeheartedly for this. Meanwhile, I'll dream up new ideas I can start to make Kickstarter projects for.