“Bene, Don Corleone. I need a man who has powerful friends. I need a million dollars in cash. I need, Don Corleone, all of those politicians that you carry around in your pocket, like so many nickels and dimes.”
–Virgil “The Turk” Sollozzo, The Godfather
“You can’t shine a turd.”
“And what most people don’t understand is the bulk of business in this country is small business.”
With the recent passage of the Jumpstart Our Business Startups Act (JOBS Act), the gates will soon open for small investors like you and me to invest in startups. Once the exclusive domain of venture capitalists and the “friends, family, and fools” group when crazy Eddie had the idea to sell personalized dust bunnies, investing in startups will be available to anyone and everyone within certain limitations. The act will prevent you from investing more than $2,000 at a time if your net worth or net income is less than $100,000, or $10,000 at a time not to exceed $100,000 if your net worth or net income is greater than $100,000.
Just because you can invest in a startup, does it mean that you should invest in a startup?
Rather than being infrequently exposed to opportunities by those in your circle of friends and family, you will be able to sift through and sort myriads of opportunities for investing in startups. Don’t think, though, that you’ll suddenly find yourself investing in a basket of Facebooks and Googles long before the IPO. Let’s look at some more sobering facts about startups.