4 ms·
Enron screwed a lot of "normal" people. A lot of employees bought their stock. Uber will just lose the VCs money.
by samfisher83 10y ago
Enron screwed a lot of "normal" people. A lot of employees bought their stock. Uber will just lose the VCs money.
- arbuge 10y agoStartups indeed do not typically require employees to shell out hard cash for their equity, but one could argue that they're just extracting payment in employee time instead.
- georgespencer 10y ago> one could argue that they're just extracting payment in employee time instead. Uh, they get a salary.
- db48x 10y agoBut usually a lower salary than otherwise.
- freddyc 10y agoAt almost every start-up that I've been involved with, the approach has been to grant employees ISOs which have a strike price (albeit very low) that the employee must pay if they want to exercise the options. They then have to run the AMT gauntlet and take on the potential tax risk. So while employees don't have to pay for the option itself, I'm not sure it's entirely accurate to say that employees don't have to shell out hard cash for the actual equity.
- jfim 10y agoAnd employees with stock options/RSUs/paper dollars.
- branchless 10y agoThey can get some of that venture goodness. Agreed that enron was far more pervasive.
- sailfast 10y agoSure, but what about companies that have gone under as a result of artificially subsidized transportation for a number of years? These companies and those jobs will not necessarily be easy to rebuild.
- neom 10y agoVCs have LPs and LPs are typically "normal" people's wealth pooled and invested, teachers pension funds, universities etc.
- maxxxxx 10y agoThe VCs are not losing their own money. They lose the money of your pension funds and your city's investments. The VCs will be fine.
- hkt 10y agoI don't know how it works in America, but there are strict rules in the UK about where money like that gets invested. It ain't with VCs. Think gilts and blue chip. I'd be surprised if even America was mad enough to let pension funds go for VC.
- maxxxxx 10y agoI know for sure that cities invest in private capital and VC. Otherwise they could never reach their income projections and would have to raise funding. That would mean either higher taxes or lower pensions which both are a no-go so let's just take higher risk.
- hkt 10y agoThat's crazy. Politics can really break incentives.