Unfortunately, we’re far from a financial system that respects retail investors. A week ago, Robinhood announced that the app will restrict the purchasing of volatile securities, most notably Gamestop.
Moves like this stifle retail investors, decrease confidence in the fairness of markets, and generally stick it to the little guy.
The 97th Floor Investing Program
Startup investing is another area under heavy regulation. Regulation means well in trying to protect the less experienced from being hurt as well as guarding against fraud, but many feel the accreditation rules are just another set of old-world rules that drive wealth inequality further. It's really a rule that favors the old saying, "the rich get richer and the poor get poorer." Seems a little backwards that someone not "accredited" can gamble in a casino but not back a startup. Crowdfunding has really shown us that the writing is on the wall for these old rules. To that end, we launched the 97th Floor Investing Program in January.
The program gives employees the chance to participate in startup funding. This gives them exposure to different startups, how they’re running, and what it’s like to raise capital. 97th Floor employees are given cash which they can invest in a startup seeking funding.
Employees are given the pitch deck and other resources where relevant to make a decision. After looking through the deck, employees are free to invest a portion or all of their allotted funds.
- Some of our investment opportunities are clients, but not all
- Employees are given funds to invest from day one
- After vesting, invested funds belong to the employee forever
It allows our people to put their money in projects they believe in, while potentially providing a tangible return on their investment. Perhaps more importantly, it also educates our employees about the startup world, VCs, angel investing and it removes the accreditation requirements on required assets. It erases two prevalent aspects of inequality: education (or more specifically access to information) and money.