5 ms·

This makes sense in theory, but seems insanely weird in practice. 1. I start a company. It’s just me. Obviously, I lead the company. 2. It’s successful! 3. I

This makes sense in theory, but seems insanely weird in practice. 1. I start a company. It’s just me. Obviously, I lead the company. 2. It’s successful! 3. I hire two more people to help with some of the low-hanging fruit that I don’t have as much time for. 4. Do I need to be careful now so that they don’t just conspire against me, elect one of themselves to “run the company” and just take the assets and run? Or is this too small of a company for this to make sense? Do we make it law for companies with more than 500 employees? So most companies will stay at 499 employees for as long as possible?

barry-cotter 4y ago
How does make sense in theory? They’ve just reinvented partnerships or cooperatives, which have not exactly outcompeted corporations despite long having had enough time to do so.
- AngryData 4y ago
  Co-ops have actually been having a pretty big uptrend in both popularity and market share the last decade. I wouldn't discount them so much.
AngryData 4y ago
You run it like a co-op and get a stake in the company no matter how your position or job changes. And you can leave and sell off your stake when you want.
lmm 4y ago
> 4. Do I need to be careful now so that they don’t just conspire against me, elect one of themselves to “run the company” and just take the assets and run? If your company was structured as a co-op, yes. Of course you'd probably make them buy in at a certain level, or else their ownership would be lower than yours by enough that they wouldn't be able to vote you down (or at least not until their share vests several years down the line). But fundamentally you should have some skin in the game; they're putting their time and effort into the company too, you owe it to them not to fuck it up and they deserve to be able to replace you if you go off the rails. > Or is this too small of a company for this to make sense? Do we make it law for companies with more than 500 employees? So most companies will stay at 499 employees for as long as possible? We don't need to mandate the co-op model, just allow it to compete and let the best model win. Tweaks to antitrust enforcement, tax treatment, and securities laws would be a good way to level the playing field. IMO it's past time to start pulling back on limited liability too (which was meant to be something granted to corporations that promised significant public benefits, not something everyone gets by default). Frankly we're already starting to see a rise in co-ops; traditionally they found it a lot harder to raise capital than traditional corporations, but nowadays there's a lot of capital sloshing around at the same time that cheaper communication, outsourcing and SAAS means lots of businesses (especially in tech) can be run in a more capital-light fashion than ever before. And who knows, maybe the CEO-as-dictator model will still win out. But we should let them fight on a level playing field so that the best model wins on its merits.
- zamfi 4y ago
  > If your company was structured as a co-op, yes. Of course you'd probably make them buy in at a certain level, or else their ownership would be lower than yours by enough that they wouldn't be able to vote you down (or at least not until their share vests several years down the line). But fundamentally you should have some skin in the game; they're putting their time and effort into the company too, you owe it to them not to fuck it up and they deserve to be able to replace you if you go off the rails. Hang on, this sounds just like a C corp with shares that employees are required to buy. No?
- lifeisstillgood 4y ago
  Agreed completely. And perhaps it helps to think of the "invested value" of the company as a form of financial and human capital invested so far - when you hire those two people you have invested maybe a year of work. A year later you have invested two years, and so have they! If you were all panning for gold (not terrible analogy for searching product market fit) then while you share the gold, you have doubled your chances

barry-cotter 4y ago

How does make sense in theory? They’ve just reinvented partnerships or cooperatives, which have not exactly outcompeted corporations despite long having had enough time to do so.

AngryData 4y ago
Co-ops have actually been having a pretty big uptrend in both popularity and market share the last decade. I wouldn't discount them so much.

AngryData 4y ago

You run it like a co-op and get a stake in the company no matter how your position or job changes. And you can leave and sell off your stake when you want.

lmm 4y ago

> 4. Do I need to be careful now so that they don’t just conspire against me, elect one of themselves to “run the company” and just take the assets and run? If your company was structured as a co-op, yes. Of course you'd probably make them buy in at a certain level, or else their ownership would be lower than yours by enough that they wouldn't be able to vote you down (or at least not until their share vests several years down the line). But fundamentally you should have some skin in the game; they're putting their time and effort into the company too, you owe it to them not to fuck it up and they deserve to be able to replace you if you go off the rails. > Or is this too small of a company for this to make sense? Do we make it law for companies with more than 500 employees? So most companies will stay at 499 employees for as long as possible? We don't need to mandate the co-op model, just allow it to compete and let the best model win. Tweaks to antitrust enforcement, tax treatment, and securities laws would be a good way to level the playing field. IMO it's past time to start pulling back on limited liability too (which was meant to be something granted to corporations that promised significant public benefits, not something everyone gets by default). Frankly we're already starting to see a rise in co-ops; traditionally they found it a lot harder to raise capital than traditional corporations, but nowadays there's a lot of capital sloshing around at the same time that cheaper communication, outsourcing and SAAS means lots of businesses (especially in tech) can be run in a more capital-light fashion than ever before. And who knows, maybe the CEO-as-dictator model will still win out. But we should let them fight on a level playing field so that the best model wins on its merits.

zamfi 4y ago
> If your company was structured as a co-op, yes. Of course you'd probably make them buy in at a certain level, or else their ownership would be lower than yours by enough that they wouldn't be able to vote you down (or at least not until their share vests several years down the line). But fundamentally you should have some skin in the game; they're putting their time and effort into the company too, you owe it to them not to fuck it up and they deserve to be able to replace you if you go off the rails. Hang on, this sounds just like a C corp with shares that employees are required to buy. No?
lifeisstillgood 4y ago
Agreed completely. And perhaps it helps to think of the "invested value" of the company as a form of financial and human capital invested so far - when you hire those two people you have invested maybe a year of work. A year later you have invested two years, and so have they! If you were all panning for gold (not terrible analogy for searching product market fit) then while you share the gold, you have doubled your chances