7 ms·

I don’t get why they accept your non-cash comp.

by minitoar 6y ago

Nextgrid 6y ago
The author mentions "tokens" so I suspect this is crypto-related and the contractors are "true believers".
- vmception 6y ago
  it doesn't require belief. liquidity is liquidity. all the stock options and private equity gamblers require a lot more belief than people compensated in tokens. so fascinating how much our realities have diverged in just a few short years, when it is very obvious which employees and contractors are wasting decades of their life for a payday that never comes. didn't plato write about this like 3,000 years ago?
  - lambda_obrien 6y ago
    It doesn't matter what they get paid, you and other company "owners" just want to keep as much of the pie as possible. The best would be a cooperative, where each employee owns an equal share of the company and has equal decision making ability.
    - vmception 6y ago
      > you and other company "owners" just want to keep as much of the pie as possible. duh? thats how all companies work and every instruction manual for founders dealing with VCs and outside capital is about that, which is what this entire forum is about. don't most of you guys here get "a very generous .005%" of a company which gets diluted three more times before it goes bankrupt? working either half a decade of your life or doing that but also paying for the privilege of buying that .005%? the people getting paid in tokens are in a much better position, way more often, as in liquidity at or above the price of their service most of the time, and people here want to create a reason why that's a problem, really wonder why people choose self-limiting realities. and why is owners in quotes? pretty much all cryptocurrencies are issued by an actual company that has actual shareholders, and books actual revenue for actual shareholders by selling the cryptocurrencies. It's not different than any other kind of organization. The tokens do not convey and securities rights in the company, but they may convey some kind of collective benefit in the token-powered product.
  - Nextgrid 6y ago
    In my case I wasn't talking about stock options, about which I agree with you. However, fiat money (or some kind of commonly-accepted crypto coin) is IMO much better than a very niche/specific token. It's much easier for someone paid in cash to convert that to something else (other currency, labor or goods) than for someone paid in a cryptocurrency (as it's harder to find people accepting it), and even harder for someone paid in some very niche cryptocurrency (by the sounds of it, you are the only one that is willing to take that "corporate scrip" of yours and exchange it for something else - that's much more risk for the contractors than a general purpose (crypto?)currency).
    - vmception 6y ago
      if you knew what a liquidity pool is you wouldn't have engaged in this conversation liquidity pools have solved all of this. locked liquidity pools solved it even better. edit for anyone passing by: liquidity pools are a fairly novel concept that allows cryptocurrencies to be exchangeable for more liquid cryptocurrencies without needing to beg exchanges to list your token. It is completely permissionless and has resulted in these systems having more liquidity and volume than non-permissionless systems, throughout 2020. Basically, anyone can form a market and they can broadcast publicly that the market won't go anywhere. This is new to crypto over the last 15 months, and is an improvement to all markets. Comes with its own new issues but the market has chosen it. https://www.coindesk.com/defi-flippening-uniswap-topples-coinbase-trading-volume https://www.coindesk.com/defi-flippening-uniswap-topples-coi... https://www.bloomberg.com/news/articles/2020-10-16/defi-boom-makes-uniswap-most-sought-after-crypto-exchange https://www.bloomberg.com/news/articles/2020-10-16/defi-boom... find a source you respect that shows you the same thing. No other asset class has assurances of secondary markets, even in mature markets people have just had to rely on actively traded markets continuing to exist in perpetuity with market makers simply being there without much understanding of how and why.
      - Nextgrid 6y ago
        Unless I'm doing something shady or trying to dodge taxes/regulations, I still don't see why I would opt to be paid in any kind of crypto token over fiat, regardless of liquidity pools. With fiat, the banking system and legal system has my back, and technical mistakes can pretty much always be resolved. With crypto, I rarely or never have the legal system protecting me, am more exposed to fraud/shadiness from the various parties involved (exchanges - see Mt.Gox, etc), whoever provides the liquidity pool, etc, and am on the hook for any technical mistakes while doing the transactions (lost the private key or mistyped the address? Tough luck!). As another commenter has said, you'd pay in cash if it was equivalent. Given that you don't, it means you have something to gain from it not being cash. I'm not implying anything illegal here, but paying in "company scrip" clearly gives you an advantage that cash wouldn't. In this case, it seems to be all good as the counterparties are happy with the deal, but I don't buy the whole idea of it being just as good as cash for the aforementioned reasons.
  - snypher 6y ago
    If liquidity was liquidity you'd just pay cash.
    - vmception 6y ago
      Can you elaborate on what you mean by that? I don't know, and someone else thinks your comment means something that validates their existing thoughts, when you haven't said anything specific. It should be obvious that the organization with cash, and shares and ability to issue debt, and newly minted tokens as a product, has an amplified ability to obtain goods and services by exchanging a variety of assets instead of just a cash position. That's not different than any other consumer facing organization, so what do you mean?
vmception 6y ago
Because that’s what is negotiated and it is easily exchangeable to cash if they desire.
- minitoar 6y ago
  Do they negotiate a higher fee due to non-cash comp?
  - vmception 6y ago
    from my experience it depends on the sentiment, the nature of the service (ie. a one-off action, a monthly service, a monthly service paid in advance, discounts), the depth of liquidity, and the contractor
    - minitoar 6y ago
      So...yes?
      - vmception 6y ago
        sometimes lower, sometimes higher, sometimes the same
        minitoar 6y ago
        What is the scenario where someone negotiates lower total comp in exchange for being paid in tokens?
jlokier 6y ago
I can answer that from personal experience: Because it's what's offered and is a good deal. I'm about to start a long-term role where non-cash crypto-tokens are part of the compensation. I'm not a "true believer" at all. I don't have any crypto at the moment, don't have a wallet yet, and to be honest it's just going to complicate my company accounts and taxation. I do know the field, and I'm sufficiently skeptical to remain not a true believer :-) Good old fiat would certainly be more convenient, and I could invest that in crypto in my own time and on my own terms if I wanted to do that. So why accept? Because I like the company (a lot so far) and the people, the company seems refreshing and well-architected, I'm looking forward to working with the people there, they are working on interesting and worthwhile problems. I anticipate I'm going to learn a lot working there, not only technical, but about real world non-technical social issues I'm not that familiar with at the moment. And the pay is good, or at least good enough. (I know I can get more by chasing consultancy contracts, but I'm taking a break from that to go all-in on a single company's product development). Generally the same sorts of reasons for choosing any job. Despite not being a "true believer" in cryptocurrency, I think I bring a grounded and mature view of the more general (non-currency) crypto ecosystem the company is working with, which will hopefully mean I contribute in a grounded and mature way to the company conversations, and in a better product for real world applications in the long run. The fact some of the pay is in crypto-tokens is understandable given the company's mission as well as its source of funding, and I'm not unhappy with that. But I wouldn't choose it to be honest if it were a genuinely neutral option on the table. But in exactly the same way, I wouldn't choose RSUs or stock options with another company if equivalent (fiat) cash were available instead. In many ways liquid crypto-tokens are much better than stock options! As a result, back to the point about corporate scrip. I think we are seeing a rise in scrip-like tokens, but, the GP is right, liquidity changes things. It gives back much of the autonomy that traditional scrip takes away. I know I can, in principle, trade the scrip for cash at any time. The volatility is not great. The uncertainty around long term value of that portion of income is not great (although I do get to choose the proportion over a substantial range, and change it when I want). But I've often been paid in international currencies too, and similar issues apply to that. There's some price volatility, it's worth keeping a balance in each currency for expenses in those currencies, and the company accounting and taxation for a small company paid a range of international currencies whose value fluctuates is also annoying. So being paid in crypto-tokens, a kind of liquid corporate scrip, is not especially more bothersome than being paid in a range of international currencies. It's mostly just different practicalities.

I don’t get why they accept your non-cash comp.

Nextgrid 6y ago

The author mentions "tokens" so I suspect this is crypto-related and the contractors are "true believers".

vmception 6y ago
it doesn't require belief. liquidity is liquidity. all the stock options and private equity gamblers require a lot more belief than people compensated in tokens. so fascinating how much our realities have diverged in just a few short years, when it is very obvious which employees and contractors are wasting decades of their life for a payday that never comes. didn't plato write about this like 3,000 years ago?
- lambda_obrien 6y ago
  It doesn't matter what they get paid, you and other company "owners" just want to keep as much of the pie as possible. The best would be a cooperative, where each employee owns an equal share of the company and has equal decision making ability.
  - vmception 6y ago
    > you and other company "owners" just want to keep as much of the pie as possible. duh? thats how all companies work and every instruction manual for founders dealing with VCs and outside capital is about that, which is what this entire forum is about. don't most of you guys here get "a very generous .005%" of a company which gets diluted three more times before it goes bankrupt? working either half a decade of your life or doing that but also paying for the privilege of buying that .005%? the people getting paid in tokens are in a much better position, way more often, as in liquidity at or above the price of their service most of the time, and people here want to create a reason why that's a problem, really wonder why people choose self-limiting realities. and why is owners in quotes? pretty much all cryptocurrencies are issued by an actual company that has actual shareholders, and books actual revenue for actual shareholders by selling the cryptocurrencies. It's not different than any other kind of organization. The tokens do not convey and securities rights in the company, but they may convey some kind of collective benefit in the token-powered product.
- Nextgrid 6y ago
  In my case I wasn't talking about stock options, about which I agree with you. However, fiat money (or some kind of commonly-accepted crypto coin) is IMO much better than a very niche/specific token. It's much easier for someone paid in cash to convert that to something else (other currency, labor or goods) than for someone paid in a cryptocurrency (as it's harder to find people accepting it), and even harder for someone paid in some very niche cryptocurrency (by the sounds of it, you are the only one that is willing to take that "corporate scrip" of yours and exchange it for something else - that's much more risk for the contractors than a general purpose (crypto?)currency).
  - vmception 6y ago
    if you knew what a liquidity pool is you wouldn't have engaged in this conversation liquidity pools have solved all of this. locked liquidity pools solved it even better. edit for anyone passing by: liquidity pools are a fairly novel concept that allows cryptocurrencies to be exchangeable for more liquid cryptocurrencies without needing to beg exchanges to list your token. It is completely permissionless and has resulted in these systems having more liquidity and volume than non-permissionless systems, throughout 2020. Basically, anyone can form a market and they can broadcast publicly that the market won't go anywhere. This is new to crypto over the last 15 months, and is an improvement to all markets. Comes with its own new issues but the market has chosen it. https://www.coindesk.com/defi-flippening-uniswap-topples-coinbase-trading-volume https://www.coindesk.com/defi-flippening-uniswap-topples-coi... https://www.bloomberg.com/news/articles/2020-10-16/defi-boom-makes-uniswap-most-sought-after-crypto-exchange https://www.bloomberg.com/news/articles/2020-10-16/defi-boom... find a source you respect that shows you the same thing. No other asset class has assurances of secondary markets, even in mature markets people have just had to rely on actively traded markets continuing to exist in perpetuity with market makers simply being there without much understanding of how and why.
    - Nextgrid 6y ago
      Unless I'm doing something shady or trying to dodge taxes/regulations, I still don't see why I would opt to be paid in any kind of crypto token over fiat, regardless of liquidity pools. With fiat, the banking system and legal system has my back, and technical mistakes can pretty much always be resolved. With crypto, I rarely or never have the legal system protecting me, am more exposed to fraud/shadiness from the various parties involved (exchanges - see Mt.Gox, etc), whoever provides the liquidity pool, etc, and am on the hook for any technical mistakes while doing the transactions (lost the private key or mistyped the address? Tough luck!). As another commenter has said, you'd pay in cash if it was equivalent. Given that you don't, it means you have something to gain from it not being cash. I'm not implying anything illegal here, but paying in "company scrip" clearly gives you an advantage that cash wouldn't. In this case, it seems to be all good as the counterparties are happy with the deal, but I don't buy the whole idea of it being just as good as cash for the aforementioned reasons.
- snypher 6y ago
  If liquidity was liquidity you'd just pay cash.
  - vmception 6y ago
    Can you elaborate on what you mean by that? I don't know, and someone else thinks your comment means something that validates their existing thoughts, when you haven't said anything specific. It should be obvious that the organization with cash, and shares and ability to issue debt, and newly minted tokens as a product, has an amplified ability to obtain goods and services by exchanging a variety of assets instead of just a cash position. That's not different than any other consumer facing organization, so what do you mean?

vmception 6y ago

Because that’s what is negotiated and it is easily exchangeable to cash if they desire.

minitoar 6y ago
Do they negotiate a higher fee due to non-cash comp?
- vmception 6y ago
  from my experience it depends on the sentiment, the nature of the service (ie. a one-off action, a monthly service, a monthly service paid in advance, discounts), the depth of liquidity, and the contractor
  - minitoar 6y ago
    So...yes?
    - vmception 6y ago
      sometimes lower, sometimes higher, sometimes the same
      - minitoar 6y ago
        What is the scenario where someone negotiates lower total comp in exchange for being paid in tokens?

jlokier 6y ago

I can answer that from personal experience: Because it's what's offered and is a good deal. I'm about to start a long-term role where non-cash crypto-tokens are part of the compensation. I'm not a "true believer" at all. I don't have any crypto at the moment, don't have a wallet yet, and to be honest it's just going to complicate my company accounts and taxation. I do know the field, and I'm sufficiently skeptical to remain not a true believer :-) Good old fiat would certainly be more convenient, and I could invest that in crypto in my own time and on my own terms if I wanted to do that. So why accept? Because I like the company (a lot so far) and the people, the company seems refreshing and well-architected, I'm looking forward to working with the people there, they are working on interesting and worthwhile problems. I anticipate I'm going to learn a lot working there, not only technical, but about real world non-technical social issues I'm not that familiar with at the moment. And the pay is good, or at least good enough. (I know I can get more by chasing consultancy contracts, but I'm taking a break from that to go all-in on a single company's product development). Generally the same sorts of reasons for choosing any job. Despite not being a "true believer" in cryptocurrency, I think I bring a grounded and mature view of the more general (non-currency) crypto ecosystem the company is working with, which will hopefully mean I contribute in a grounded and mature way to the company conversations, and in a better product for real world applications in the long run. The fact some of the pay is in crypto-tokens is understandable given the company's mission as well as its source of funding, and I'm not unhappy with that. But I wouldn't choose it to be honest if it were a genuinely neutral option on the table. But in exactly the same way, I wouldn't choose RSUs or stock options with another company if equivalent (fiat) cash were available instead. In many ways liquid crypto-tokens are much better than stock options! As a result, back to the point about corporate scrip. I think we are seeing a rise in scrip-like tokens, but, the GP is right, liquidity changes things. It gives back much of the autonomy that traditional scrip takes away. I know I can, in principle, trade the scrip for cash at any time. The volatility is not great. The uncertainty around long term value of that portion of income is not great (although I do get to choose the proportion over a substantial range, and change it when I want). But I've often been paid in international currencies too, and similar issues apply to that. There's some price volatility, it's worth keeping a balance in each currency for expenses in those currencies, and the company accounting and taxation for a small company paid a range of international currencies whose value fluctuates is also annoying. So being paid in crypto-tokens, a kind of liquid corporate scrip, is not especially more bothersome than being paid in a range of international currencies. It's mostly just different practicalities.