7 ms·

Let's say I start a Saas company and it does really well. Somebody offers to invest at a valuation of 25$ million bucks. By most standards of evaluation net wor

• ksdakfasdf 5y ago
  It's abstract until it isn't. Is the offer to invest 25$ million abstract?
  • CodesInChaos 5y ago
    The offer is to invest 2.5M in exchange for 10% of the company. There is no offer to buy all your shares for 25M.
  • jonfw 5y ago
    It's absolutely abstract! Who is this buyer, does he really have the money, is he going to follow through, is this legal?
• AnIdiotOnTheNet 5y ago
  The tax could be such that you are forced to turn over shares in the company to the state. The bigger you get, the more shares you have to give to them, the more influence they have on company decisions. In theory, this would act sort of as a general purpose regulation. Instead of using the force of law to make companies comply, it uses the force of its share votes. Of course, there are a bunch of ways this kind of scheme could go wrong too.
  • flyinglizard 5y ago
    What does the government know about managing tech companies?
    • AnIdiotOnTheNet 5y ago
      Ideally they wouldn't care much about the day to day operations of a company or even that it is profitable and they would use their voting shares only to prevent decisions that actively cause societal harm or to favor ones that actively benefit society. Like I said, there's still a lot that could go wrong with that scheme, but it isn't like the current scheme doesn't have its problems too.
      • flyinglizard 5y ago
        How would you manage this very site by these criteria? Would you still cover cryptography, freedom of information, civil unrest and bills which damage fundamental rights?
        • AnIdiotOnTheNet 5y ago
          Does this site even make money? Ok, assuming that we're treating HN like a business and that business is large enough to have significant government voting share under this scheme: The government voting with its shares to silence those stories would potentially be actual censorship under the US constitution, and therefore illegal. The same cannot be said about private owners. Of course, the government could opt to transition the site away from those topics entirely, but again that's something the private owners could do too. And none of this prevents small competitors from coming in to run those stories. Let me turn it around: Would Facebook have more or less freedom of speech with government control?
          • flyinglizard 5y ago
            I’d assume Facebook would be appointed a partisan czar during each administration, much like many government agencies. Unlike the EPA or FCC though, controlling Facebook has huge political implications.
            • AnIdiotOnTheNet 5y ago
              Right, so it is best we leave that to Mark Zuckerberg, who surely has no political agenda whatsoever.
  • andreilys 5y ago
    Centralizing state power has never gone wrong in the history of humanity right? And we all know how efficient government bureaucrats are. I can just imagine the joys of having civil servants dictating how you should run your company.
    • AnIdiotOnTheNet 5y ago
      > And we all know how efficient government bureaucrats are. A common refrain in the private sector, but having worked in both I can assure you that any sufficiently large organization is at least as inefficient as a government. > I can just imagine the joys of having civil servants dictating how you should run your company. We do that today through regulation. There are reasons we collectively want some level of control over how companies are run.
      • andreilys 5y ago
        We do that today through regulation. There are reasons we collectively want some level of control over how companies are run. Regulations are different from a Washington bureaucrat far removed from your company having to approve your new fiscal year roadmap or plans to pivot the company
        • AnIdiotOnTheNet 5y ago
          Why would that be significantly different than anyone else with a voting share? It's not like the government is incapable of hiring the kinds of people who sit on boards of directors.
  • nitrogen 5y ago
    Generally, a deeply intertwined state and corporations is called by a term that tends to get overused. State ownership of businesses is usually not seen as a good thing.
    • AnIdiotOnTheNet 5y ago
      That's a fair point, which I honestly hadn't quite put together when I wrote that. Still, falls under the "lots could go wrong" category.
  • ericd 5y ago
    That sounds hilariously demoralizing. Talk about Pavlovian training in the wrong direction, every time I find a way to boost the value of my company, I have to sign more of it over the government.
    • jayjader 5y ago
      It depend on what is done with said boost. It would go straight into your wallet? Makes perfect sense to me for the government to get an additional cut. It would go straight into the companies' salaries? No reason for the government to touch it more than it already does. Obviously, there's room for nuance and it's not just one or the other.
      • ericd 5y ago
        Company value is decreased when earnings are dividended out “into your wallet” or paid out in salaries, so I’m talking about neither.
        • jayjader 5y ago
          obviously, just like I'm talking about what you _do_ with the increase. Are you really just saying to leave the increase in value alone? Then why pursue it? I'm under the impression that an increase in company value is not an end to itself, it's a means to an end (more investment, more dividends, higher sell-off/buy-off price, increased stock price, etc - all are more probable when company valuation increases). So why are you looking to increase your company's value?
          • ericd 5y ago
            Basically, for most founders past the point where material comfort stops mattering, I think it’s power. The power to do what you want in the world. More ambitious projects, especially. Eventually that can get to extreme heights, like trying to design rockets that go to Mars, or trying to stamp out malaria.
    • AnIdiotOnTheNet 5y ago
• libertine 5y ago
  >Taxes on net worth won't work because net worth is abstract If it's abstract why can you use it as collateral? You have to make up your mind, it's funny money or real money?
  • jonfw 5y ago
    I can also use my word as collateral, should I be taxed on that?
    • libertine 5y ago
      Do you think your word has the same millage has 25 million net worth. Because that's what we're talking about here. I don't know how the banking system works in the US but I doubt you'll be able to buy much money with your word alone.