P2P venture capital a viable niche?

BizzFlip published a thought provoking article where they proposed P2P lending for venture capital.

"With Peer to Peer Venture Capital (or maybe to be a little more accurate think of it as Peer to Peer Angel Money), a person would be giving money to (or investing in) a company, product, idea, etc. in hopes of making a large amount of money off of a percentage of the profits.

It seems intuitively that off the top there will be some obstacles to making P2P Venture Capital a reality. First off, how do you determine someone is credible and not a
Conman? That one seems like a relatively easy fix with certain qualifications needed to become a member. More importantly is that venture capital is a little bit different than loans. There are certain negotiations needed and what about non-disclosures? Then the legal terms will have to be laid out for each potential deal. I can anticipate that some variation of the P2P Venture Capital idea will sprout up in the next few months or years (if there aren’t any already that I haven’t heard of)."

TechDirt counters with this argument - Isn't P2P Venture Capital Just Going Public?

"As there appears to be a growing market for p2p lending services, that has some wondering if there's also a market for p2p venture capital as well. In p2p lending, a group of ordinary folks all team up to lend people money. The various players in the space have had somewhat mixed results so far, but there's a lot of attention. However, for most companies, getting access to capital involves options between taking out a loan (which needs to be paid back plus interest) or selling equity (usually to venture capitalists). In that case, the money comes from someone who takes some percentage of ownership and hopes to cash in not on the interest, but on the growth of the value of his or her shares. So, it might make sense to wonder whether the p2p lending companies might eventually move into p2p venture capital as well... except that we already have p2p venture capital: it's called the public equities markets. If you actually tried to do that with private companies, you'd quickly run into all sorts of trouble with the SEC, which is pretty strict in terms of regulating how a company goes about raising money in exchange for equity. In fact, there are many who believe that a startup may be toeing the SEC's line simply by saying that it's out raising venture money. So, for a variety of reasons, both regulatory and because public equities markets already are p2p venture capital offerings, it's hard to see there being a huge market for companies to get into offering p2p venture capital."