This week, Fred Wilson raised an idea
that is gaining a lot of attention. The idea is to provide a means for venture investors to be able to cash out their investments in startups without having to wait for an IPO or an acquistion. Wilson's idea is to create a public market for institutional/sophisticated investors so that "stocks" in startups could be traded. He elaborates further in this video
Essentially, a lack of liquidity constrains the funding/investing process because money is tied up that could otherwise be going to fund new companies, etc. Also, because investors have to factor in illiquidity risk, it increases the cost of funding new companies.
Given that illiquidity or inaccessibility to funding seems to be a common concern in Hawaii, this approach could be a significant help to Hawaii startups. Thoughts?
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