Subject: Re: offering pre-purchases
From: "Stephen J. Turnbull" <>
Date: Sat, 20 Oct 2007 03:19:26 +0900

Don Marti writes:

 > > Hey, if they're willing to pay Tom a salary, *he* wouldn't need to be
 > > in either the prepurchase market or the prediction market.  It's
 > > precisely because they are *not* willing that this thread happened.
 > They're less likely to be willing now because
 > their current options for getting a return on their
 > investment depend on risks other than the research
 > risk.  They can't make a bet on whether or not Tom
 > will invent something -- they have to bet on whether
 > Tom will put together a whole team to actually make a
 > product, get a patent and license it, or get a patent
 > and sell it to a troll.

What bet?  Tom is not going to get and license patents, it's against
his religion, and you only have to talk to him for about 15 minutes to
realize that if his given name were "Steve", his surname would begin
with "W" not "J".  Tom *is* thinking in terms of business, and he's
willing to put effort into marketing *his* business, but that business
is R&D, not marketing.

This is the nub of the problem, always has been.  Neither prepurchase
markets nor prediction markets help with this.  The bet is on whether
Tom will produce something useful to you in his research, but
realizing that and making use of it is your problem.  But nobody but
Tom can capitalize it without IP, and IP (so far, at least) has been
unacceptable to him (and of course takes it right out of the sphere of

 > Many investors want to split up and reaggregate investments.

It seems likely to me that our favorite whipping boy, the cranially
insufficient venture capitalist, continues to receive power, glory,
money, and social approbation precisely because this risk is not
securitizable.  If you've got enough money, you can diversify by
buying more than one, but it's not really possible to "split up" and