We Put Financial Advisers to the Test–and They Failed — Antoinette Schoar

MIT Sloan Prof. Antoinette Schoar

MIT Sloan Prof. Antoinette Schoar

From The Wall Street Journal

The world we live in asks us to make an abundance of financial decisions every day. These range from the inane, such as whether to risk a parking ticket when you stop for one minute to drop off your dry-cleaning; to the highly complex, such as which funds and investment products to pick for your retirement savings.

All of these decisions require risk-return tradeoffs. Unfortunately, while people have many opportunities in life to perfect their strategy concerning parking tickets, the same is not true for the complex and all-important decisions of how to invest retirement savings. By the time you learn whether a retirement strategy was the right choice, it is usually too late to change it.

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VC investment slowdown: an important test for equity crowdfunding — Christian Catalini

MIT Sloan Professor Christian Catalini

MIT Sloan Professor Christian Catalini

From The PE Hub Network

In 2015, venture capitalists invested $58.8 billion in the United States, topping the figures for the previous two years by a substantial margin. In 2016 investors have been substantially more cautious, and if the current slowdown is a course correction rather than a blip, it will also be an important test for the nascent equity crowdfunding market.

Many equity crowdfunding platforms have sprung up, including AngelList, FundersClub, Wefunder, OurCrowd andSyndicateRoom.

To succeed, these two-sided markets need enough good investors to be attractive for entrepreneurs to post their ventures, and enough high-quality ventures to be worthwhile for investors to spend time and capital on them. If early-stage capital becomes tougher to obtain, only platforms that are surfacing high-quality deals and matching them efficiently will be able to keep growing.

Lead-Crowd Syndication

A particularly interesting feature within the equity-crowdfunding world involves syndication between the crowd and a lead investor. Platforms that have introduced syndication, like AngelList and SyndicateRoom, have done it to address the problem of information asymmetry.

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Twitter Chat recap with Georgina Campbell Flatter — #MITIdea2Impact

Georgina Campbell Flatter, MEng (Oxon) SM, is the Executive Director of the MIT Legatum Center for Development and Entrepreneurship at MIT and Lecturer in Technological Innovation, Entrepreneurship, and Strategic Management at the MIT Sloan School of Management

Georgina Campbell Flatter, MEng (Oxon) SM, is the Executive Director of the MIT Legatum Center for Development and Entrepreneurship at MIT and Lecturer in Technological Innovation, Entrepreneurship, and Strategic Management at the MIT Sloan School of Management

The MIT Legatum Center for Development and Entrepreneurship together with the MIT Sloan Office of International Programs (OIP) will bring together entrepreneurs, policymakers, and philanthropists from around the world next week to accelerate global change through innovation-driven entrepreneurship – a powerful mechanism for alleviating poverty and generating prosperity.

MIT Sloan Experts participated in a Twitter chat with Georgina Campbell Flatter MS MEng, Executive Director, MIT Legatum Center for Development & Entrepreneurship, Lecturer in Technological Innovation, Entrepreneurship, and Strategic Management and  Chris Stokel-Walker, a dynamic writer for The EconomistThe Guardian and The New Statesman.

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Join Georgina Campbell Flatter for a Twitter chat on accelerating global change through innovation-driven entrepreneurship and finance

mit_london_2016

On December 13 in London, the MIT Legatum Center for Development and Entrepreneurship together with the MIT Sloan Office of International Programs (OIP) will bring together entrepreneurs, policymakers, and philanthropists from around the world to accelerate global change through innovation-driven entrepreneurship – a powerful mechanism for alleviating poverty and generating prosperity.

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The heavy burden of being labelled systemically important — Robert Pozen

MIT Sloan Senior Lecturer Robert Pozen

MIT Sloan Senior Lecturer Robert Pozen

From Financial Times

Almost everyone would agree that large banks like JPMorgan and Citigroup should be classified as Sifis — the melodious acronym for systemically important financial institutions, whose failure would produce widespread shocks to the financial system.

To reduce the chances of failure, regulators have imposed a broad array of extra requirements for capital, liquidity and risk controls on these Sifis.

The need for these requirements is less clear for two other categories of financial institutions currently labelled as Sifis: midsize regional banks and large insurance companies. Both types of institutions have been unsuccessful in getting their Sifi label dropped by regulators or legislators.

However, activist hedge funds have taken a more fruitful tack, pushing for structural changes to avoid the label at some midsize banks and large insurers.

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