I think there are several problematic aspects. First, the incentives are all fucked up. Why would I pay more money to have my best colleagues leave vs. my worst

I think there are several problematic aspects. First, the incentives are all fucked up. Why would I pay more money to have my best colleagues leave vs. my worst? Indeed many made the joke that they'd be more than willing to pay several thousand to get rid of their least productive or most annoying colleagues. Similarly, the company hiring has non-zero incentive to fire the candidate before 2 months and the keep the bounty. This isn't likely to happen in "hot" industries like software, but the goal of startups is to grow and spread into other markets. Second, this makes moving from a low paying region/industry to a higher paying one more difficult since the bounty is based on the target salary for the role. A software engineer coming from Russia is probably not going to be able to raise $20k USD from his Russian colleagues while applying to a job in SF. In effect this bounty system reduces social mobility. You might counter that the option to interview still exists, but if there's one job opening and you can get it "automatically" by raising money the candidate who raises cash the fastest (i.e. knows the most wealthy people) wins by default.