Jeremy Allaire, CEO and founder of Circle – a top stablecoin issuer and owner of investment crowdfunding platform SeedInvest, has sent a tweet out defending securities crowdfunding and more specifically SeedInvest. In response to a statement by noted VC Paul Graham, Allaire said returns generated by offerings on SeedInvest have been “very strong relative to VC comps.”
Investing through vetted marketplaces of startups like @SeedInvest gives individual investors a strong path into startup investing. SI IRRs have been very strong relative to VC comps. https://t.co/bN1kuKLJFc
— Jeremy Allaire (@jerallaire) September 28, 2021
The tweet by Graham, from last month, stated:
“The median investor in public companies gets below market returns. Investing in startups is at least as hard as investing in public companies, and probably a good deal harder. So why do people think it’s going to work out well for individual investors to do it?”
Graham’s tweet sent to his 1.3 million followers, generated a long thread both agreeing and challenging Graham’s statement.
SeedInvest is a full-stack crowdfunding platform listing securities in the US issued under Reg CF, Reg D and Reg D. SeedInvest has not shared portfolio metrics for its securities offerings as far as we know. Early-stage investing on crowdfunding platforms tend not to be for the risk-averse and investments usually take years to decipher whether the investment will generate a gain or not – similar to venture capital. But platforms provide a path to early stage investing for the masses – an asset class that may be risky but can also generate outsized returns if the company is successful.
Circle is expected to become a publicly-traded firm in a SPAC deal that should close later this year.