3 ms·

Equity is something else, right? Actors aren't given shares of the studio in return for making a show; they're given a % of the sales. (A looooow % based on t

Equity is something else, right? Actors aren't given shares of the studio in return for making a show; they're given a % of the sales. (A looooow % based on this article.) Equity in software is weird. At small companies, it's pretty much like winning the lottery. (I got $0 per share I owned the last time around. That's about what I valued it at, so no big deal.) At big companies, your work probably doesn't play any role in affecting the stock price. For that reason, I think residuals are a unique thing not covered by equity. Having said that, I'm mostly kidding. The "we pay you for the hours you show up" is a relatively fair model and has worked well in our industry.

toomuchtodo 3y ago
My point of this subthread is that royalties, dividends, equity, whatever are all just mechanisms to reward based on upside in a collective endeavor, and can be negotiated as a compensation component. If you're functioning within capitalism, the idea that you keep getting paid for something you're not actively working on shouldn't be foreign. Look no further than your index funds, whether growth or income producing securities. What makes royalties unpalatable with these concepts in mind? Not much different than VTI, SCHD, etc (public securities, growth and income producing respectively, if you're unfamiliar). You have acquired an asset in some manner (either paying for it with fiat or with your time), and you are holding it for future economic benefit. For example: I receive dividends from a friend's vending machine business I invested in to help them rapidly scale up (including me lugging vending machines to locations, setting up infra to monitor remotely and accept payments, etc). That is no different than equity in a SaaS product or someone's contributions to a major motion picture. I agree there is a lot of nuance (ie all of your points), but the conversation should be "how is ownership valued and distributed? is it reasonable and equitable?"
scarface_74 3y ago
> Equity in software is weird. At small companies, it's pretty much like winning the lottery What’s weird about it? Stock in public companies are also “equity”. It’s not winning the lottery in that case. I know my shares of AMZN are going to be worth something as they vest. That’s the reason I refuse to work for a startup at this point in my life. It was bad enough when my RSUs dropped from $140 to $90 by the time my first shares vested (back to $130 now and I got a refresher that mostly made up for it). But that’s a kid better than waiting for an exit.

toomuchtodo 3y ago

My point of this subthread is that royalties, dividends, equity, whatever are all just mechanisms to reward based on upside in a collective endeavor, and can be negotiated as a compensation component. If you're functioning within capitalism, the idea that you keep getting paid for something you're not actively working on shouldn't be foreign. Look no further than your index funds, whether growth or income producing securities. What makes royalties unpalatable with these concepts in mind? Not much different than VTI, SCHD, etc (public securities, growth and income producing respectively, if you're unfamiliar). You have acquired an asset in some manner (either paying for it with fiat or with your time), and you are holding it for future economic benefit. For example: I receive dividends from a friend's vending machine business I invested in to help them rapidly scale up (including me lugging vending machines to locations, setting up infra to monitor remotely and accept payments, etc). That is no different than equity in a SaaS product or someone's contributions to a major motion picture. I agree there is a lot of nuance (ie all of your points), but the conversation should be "how is ownership valued and distributed? is it reasonable and equitable?"

scarface_74 3y ago

> Equity in software is weird. At small companies, it's pretty much like winning the lottery What’s weird about it? Stock in public companies are also “equity”. It’s not winning the lottery in that case. I know my shares of AMZN are going to be worth something as they vest. That’s the reason I refuse to work for a startup at this point in my life. It was bad enough when my RSUs dropped from $140 to $90 by the time my first shares vested (back to $130 now and I got a refresher that mostly made up for it). But that’s a kid better than waiting for an exit.