> back in the dot com boom this thing would have been held by mom and pop.
Who also should have known better. If someone doesn't understand how a company they invest in makes a profit, or what the risks to that company are, they have no business investing in it. For example, I hold agency-MBS REITs in my portfolio, but only because I'm willing to read the quarterly filings and keep an eye on news relevant to interest rates. They are absolutely not an investment I would recommend to most people who want something simple they can "set and forget."
No. Retail investors don't have the opportunity to scrutinize the company's records beyond what is publicly availbale, to take up references, or to meet with the management team. The VCs and funds investing in late-stage private companies do have these options. They can do as much, or as little, due-diligence as they like. And not just because they can demand things as a condition of the investment, but because it's perfectly reasonable to spend $50,000 on a couple of expert technical opinions when you're investing $1m+ but unfeasible if you're putting in $30k of life savings.
Who also should have known better. If someone doesn't understand how a company they invest in makes a profit, or what the risks to that company are, they have no business investing in it. For example, I hold agency-MBS REITs in my portfolio, but only because I'm willing to read the quarterly filings and keep an eye on news relevant to interest rates. They are absolutely not an investment I would recommend to most people who want something simple they can "set and forget."