Do venture capitalists ask for insurance?
for the amount of money we are giving them, we would get more than 5% ownership if we were venture capitalists. We'd also get a bigger chunk of the profits.
You don't get the potential growth without taking on the risk yourself.
what potential growth? Even their own optimistic estimates put this at 6% APR with 50 new listings a year. The investors here are taking ALL the risk and getting very little in return.
You want a guaranteed return on your investment, go buy 0.2% treasuries or something "safe".
For the level of risk with this venture, we should be getting a bigger cut for us effectively loaning them our money. Look at the other securities with similar risk profiles. The APR is 30% or more.
I mean, 2 of their competitors closed within the last 2 months, and both competitors were considerably larger, had significantly more users/listings, had better service, had better interfaces/platforms, and they STILL closed. What does HL bring to the market? "We're not closed... yet" In every single way, they offer an inferior service to those that have shut down.
On the subject of risk and some sort of mitigation for that risk, look at XBOND, they are paying 17% and have considerably less risk than this security.
Go play at the kids table if you can't handle it.
Adults do the math, and when it doesn't add up, they ask questions. I know you're new here, so I'll let that one slide, but you should really be asking questions, not jumping on those that do.