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If the worker is paid for their time, they aren't owed anything for it. If they are taking below market - as I said that may be unfair - then at most their inve
by jeremyjh 7y ago
If the worker is paid for their time, they aren't owed anything for it. If they are taking below market - as I said that may be unfair - then at most their investment is the delta to market compensation.
Also, investors puts in all the money upfront; there is a concept called time value of money that applies here, and what it means is that money paid upfront is worth more than a distribution of the same amount over time. The higher the cost of borrowing (cost of capital), the more valuable that upfront investment is.
- superqd 7y agoIf the investor is paid for their dollars, then they aren't owed anything for them either by the same logic. And they most definitely are paid. Investors are compensated for their dollars because they exchange those dollars for time, just as the worker exchanges their time for dollars. Whether an investor puts money up front or not is irrelevant, as it is only converted to time incrementally as the time is traded for it. Any excess dollars in the bank can, and frequently are, returned to the investor in an exit. Hence they only trade in dollars to match what is invested in time (when only accounting for labor).