Reply to: This is a really good idea

[DaveB]

Except at its heart it's gambling; it's still exploiting the weak and stupid as a way of raising money. The money might go towards good things, but then is propping up businesses and jobs that much more deserving than the "good causes" the national lottery raises money for?

It certainly has a much more direct impact on the local community than the National lottery is likely to. It's creating an on going investment fund for local business, creating jobs and supporting the local economy. Charity begins at home and all that.

[d000hg]

Dumb scheme. Viable businesses don't need charity.

Many, many very successful businesses only exist thanks to investment by friends and families, or from Angel investors who are the next thing to charity.

[doodab]

Dumb scheme. Viable businesses don't need charity. Charity, in this context, is much more likely to misallocate scarce resources which would be better allocated somewhere else.

Where does this belief that a "viable business" will automatically make money from day 1 come from?

Amazon, eBay, google, apple all needed "charity" as you put it at some point.

[SpontaneousOrder]

Dumb scheme. Viable businesses don't need charity. Charity, in this context, is much more likely to misallocate scarce resources which would be better allocated somewhere else.

[doodab]

You'd really invest if the chances of getting any money back was 5000:1? You wouldn't have money to invest for long.

It depends on the pay off. If I could make 10,000 investments with a 5000:1 chance of paying out £10,000 then I would. That's more or less what VCs do, they know that the vast majority of companies they invest in will come to nothing, but 1 in 100 that pay off will more than compensate. It's like the concept of "pot odds" in poker. You don't expect to win them all, you play the numbers so you win on average.

These people also enjoy the benefits of living in a healthier local economy with lower unemployment. I'd say that's a sensible investment myself.

[VectraMan]

There is a pay off the same as any other investment. Lots of investors put money into companies based on lottery like odds of seeing a return

You'd really invest if the chances of getting any money back was 5000:1? You wouldn't have money to invest for long.

and lots of people (friends, family, founders) lend to startups interest free, or even give people money to start a business.

And they're probably suckers for a different reason.

[doodab]

So why make it a lottery? Why not just encourage people to invest: you put in a pound, and if the company doesn't default on the loan, you get your pound back.

And if it defaults, you don't. Bit of a lottery really. Without the prize.

Yes, because as above, people are suckered into doing it because they think they have a chance of winning the jackpot. No investor would put money into a company based on lottery like odds of seeing a return, and no investor would lend to a company on an interest free basis. This only works because the poor and stupid are making up the shortfall.

Who says they are suckered into it? There is a pay off the same as any other investment. Lots of investors put money into companies based on lottery like odds of seeing a return, and lots of people (friends, family, founders) lend to startups interest free, or even give people money to start a business.

[d000hg]

Except at its heart it's gambling; it's still exploiting the weak and stupid as a way of raising money.

You don't have to be weak or stupid to gamble.

[VectraMan]

Nope. I do about three such lotteries every week. all were sold to me as fund raising with a charitable elements rather than a chance to win a large sum of money.

So why make it a lottery? Why not just encourage people to invest: you put in a pound, and if the company doesn't default on the loan, you get your pound back.

Is it any more "gambling" than investing directly in the same businesses?

Yes, because as above, people are suckered into doing it because they think they have a chance of winning the jackpot. No investor would put money into a company based on lottery like odds of seeing a return, and no investor would lend to a company on an interest free basis. This only works because the poor and stupid are making up the shortfall.

[doodab]

Except at it's heart it's gambling; it's still exploiting the weak and stupid as a way of raising money. The money might go towards good things, but then is propping up businesses and jobs that much more deserving than the "good causes" the national lottery raises money for?

Is it any more "gambling" than investing directly in the same businesses?

Is it "propping up businesses" any more than bank lending to the same businesses?

I think the fact the money is loaned rather than granted makes it significantly different than the lottery.

[eek]

Except at it's heart it's gambling; it's still exploiting the weak and stupid as a way of raising money. The money might go towards good things, but then is propping up businesses and jobs that much more deserving than the "good causes" the national lottery raises money for?

Nope. I do about three such lotteries every week. all were sold to me as fund raising with a charitable elements rather than a chance to win a large sum of money.

The great thing is that once the initial sign ups are organised the standing order will just continually collect the small weekly / monthly sums....

[VectraMan]

It's a community investing in itself rather than looking to others or wasting resources funding futile strikes. Really innovative idea IMO. I'm surprised it's been going 20 years and hasn't been emulated all over the country.

Except at its heart it's gambling; it's still exploiting the weak and stupid as a way of raising money. The money might go towards good things, but then is propping up businesses and jobs that much more deserving than the "good causes" the national lottery raises money for?

[doodab]

It's a community investing in itself rather than looking to others or wasting resources funding futile strikes. Really innovative idea IMO. I'm surprised it's been going 20 years and hasn't been emulated all over the country.

[VectraMan]

everyone's a winner.

Except for all the losers, obviously.

[vetran]

What about the banks? They don't appear to be getting anything out of this? That'll have to change.

Love,

Dave C

Not sure he actually thinks like that.

Its Big Society isn't it.

I like it and its sounds like a really good initiative, anything that creates private sector jobs is normally good.