This actually works pretty well at the very beginning when the stock isn’t worth anything. However, as soon as there is a supportable valuation, you can’t just

This actually works pretty well at the very beginning when the stock isn’t worth anything. However, as soon as there is a supportable valuation, you can’t just give people stock with a nominal value for 0.01 or whatever, which means either they have to buy it at “market” or you are giving them a taxable benefit of same. This latter is terrible because you are getting taxed as income with an illiquid and risky, locked in, asset… (All this depends on jurisdiction of course)