What are the drawbacks of a K-1?

[Troy P.]

I was reading comments about some crowdfunding site.  Someone said they weren't attracted to a particular investment because it was a K-1 instead of a 1099.  I was a little confused since a K-1 allows you to claim paper losses and would, in my mind, be more beneficial.  There was no explanation and I can't seem to figure out why this would be a less desirable option in your analysis.  Am I missing something?