Small Business Investment Trust

From Zanecorpwiki

Small businesses are too small for big investors to be interested in, but the investment laws prevents them from soliciting investments from the public. There's an obvious deficiency in the law (though it's equally obvious what very real problems the law addresses).

Fool.com notes that almost all the top performing stocks are small cap. I would propose that the study is ignoring what are almost surely even better performers: private businesses too small to be on any index.

There's obviously a lot of risk in this area, because it's also true that index style investing tends to lead to better results if one focuses on large cap companies. Funding these companies is a serious problem. Not so much for the companies, but for society. The stock market wastes money. First, in the sense that the money doesn't go directly to any real purpose--that's part of the reason why it tends to bubble. It also wastes money by pulling money out of the economy that could be used at the low end.

The low end is where almost all the value comes from, so anything that can shift resources towards the most productive end of the spectrum obviously makes a lot of sense. In the end, there will be many solutions, but one I would like to see is a high profile, public company (which would mean it can garner investments easily) which then turns around and invests in the smallest of companies... and does so in a way fundamentally different than the VCs because the goal is to keep the company viable, not to sell it.

The goal would not primarily be profit, but improving society, and improving the economy. It may even be structured as a non-profit.