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Poorly. I did all the work while my friend goofed off and ran personal errands all day. The friend eventually made a fortune selling their equity and retired yo

Poorly. I did all the work while my friend goofed off and ran personal errands all day. The friend eventually made a fortune selling their equity and retired young. I did not get awarded the same privilege. We no longer speak and I still get angry when I think about that. On the other hand, I have made good friends through the workplace who I would start a startup with in a heartbeat.

jongjong 3y ago
Such situations make me furious, but not so much at individuals as at the system. Getting equity in a startup is ridiculously high friction. It's often been a deal breaker for me; not because the founder themselves had personal objections, but because of bureaucratic nonsense such as; it was too much hassle legally or other large investors wouldn't like it, etc, etc... IMO, it should be illegal to launch a limited liability company/corporation and only allow specific people to buy shares. I object to the idea of incorporation and limiting directors' liability to begin with but since it is allowed, at the very least, it should be a requirement under the law that the shares be on the open market such that anyone who wants them can buy them and resell them at any time. The current system is a scam. They can select exactly who gets to ride the ship to the promised land. That's completely wrong, discriminatory and evil.
- dheera 3y ago
  > it should be a requirement under the law that the shares be on the open market such that anyone who wants them can buy them and resell them at any time. No, I deeply disagree with this. This is the reason we have issues like the 737 Max. Earnings reports and a bunch of idiot shareholders who don't understand a flying hoot about aircraft owning bits and pieces of an aerospace company and exerting control over it and pressure to "beat earnings". I'm very much on board with being generous in giving ownership to employees. But open market? No. F that. Avoid it as long as possible and pay your employees dividends instead.
- fendy3002 3y ago
  Yeah any startup that pitched me with equity always note that it can only be liquidated during vesting or whatever it is. Though in paper it sounded fair, in my opinion it gives the decision power to CEO too much that I always decline it. And also the equity that they give is based on some valuation that's not even real, it's hard to hold that value of.
  - varispeed 3y ago
    I've seen an instance where someone would have to be 3 years at company to be able to cash their shares. He took it as an exchange for lower salary to help company grow. The owners closer to 2 year mark would make his life at company a hell, just so he would quit. He couldn't bear to work there anymore so he left and lost the shares.
    - polynomial 3y ago
      3 years is or at least was absolutely standard. I did notice an uptick in 4 year vests, but not enough evidence to call it a trend.
      - rfrey 3y ago
        3 or 4 years for full vesting, sure - but not to start vesting. A 6 month or 1 year "cliff" where you start vesting a portion of your shares is pretty standard.
- fauigerzigerk 3y ago
  > IMO, it should be illegal to launch a limited liability company/corporation and only allow specific people to buy shares. I object to the idea of incorporation and limiting directors' liability to begin with but since it is allowed, at the very least, it should be a requirement under the law that the shares be on the open market such that anyone who wants them can buy them and resell them at any time. I don't understand how this could possibly work. If I start a company on my own and I provide all the equity then I own all the "shares". What would it mean for those shares to "be on the open market"? If I'm not selling them then no one can buy them. And if it was a trivial low-regulation thing to create shares and sell them to the public, it would undermine the entire body of regulations they put in place to prevent scams and ensure transparancy. >The current system is a scam. They can select exactly who gets to ride the ship to the promised land. That's completely wrong, discriminatory and evil. No, "they" can not select who gets to ride the ship to the promised land. They can only make an offer that others are free to accept or reject. If I think that my labour makes a huge difference to the success of a company, then I'm not going to provide that labour unless I get a huge chunk of the company. It's a negotiation. I can just walk away and start my own company. And by the way, if you got your wish and limited liability was abolished, then all shareholders would be on the hook for any and all debts the company cannot pay (jointly and severally). That would include employees paid in shares. It contradicts your desire for broad share ownership.
  - jongjong 3y ago
    >> If I start a company on my own and I provide all the equity then I own all the "shares". What would it mean for those shares to "be on the open market"? If I'm not selling them then no one can buy them. If you own all the shares initially, it means you get to set the price to whatever you want (and hope that someone is willing to pay that price), or you can just hold them and keep them all to yourself. BUT, if you decide to sell them, you can't just sell them to a specific person over the counter. You'd have to sell on a market so that anyone can potentially buy them and potentially outbid your intended investor. >> And if it was a trivial low-regulation thing to create shares and sell them to the public, it would undermine the entire body of regulations they put in place to prevent scams and ensure transparancy. These regulations are completely useless at preventing scams and it's not the government's job to protect people from scams ahead of time. It's extremely disingenuous to suggest that the government can even know what is a scam ahead of time... Scams like FTX were allowed to grow to billions of dollars and the regulators didn't bat an eyelash until the whole scheme was blown wide open. The only correct, honest way to handle it is that if people get scammed, they can sue the scammer to try to recover as much money as possible. The person who lost the money is partly responsible because they failed to judge the founder's character. >> If I think that my labour makes a huge difference to the success of a company Nobody's Labour ever makes a difference. The success of any project is all about capital, political leverage and media exposure. Let's be honest here. >> And by the way, if you got your wish and limited liability was abolished, then all shareholders would be on the hook for any and all debts the company cannot pay (jointly and severally). That would include employees paid in shares. It contradicts your desire for broad share ownership. I would be fine with that. My strategy would be to only invest in small or medium-sized companies whose founders I can trust and who can manage their risk. The bigger the company, the higher the risk. All of society would be better off if everyone did this. This is not a new concept. It used to be how humans did business for thousands of years. They did just fine, in spite of having very little technology at their disposal. Then finally honesty would be worth something again... It's terrifying how everyone blindly trusts criminals just because the government gave them its stamp of approval.
- deleted 3y ago
  [deleted]
rgblambda 3y ago
>while my friend goofed off and ran personal errands all day. "A CEO's high compensation is justified by the skills, experience, and dedication they bring to the role." I doubt this is only an issue at startups. I've noticed that the higher up the rungs of the corporate ladder you climb, the easier it is to get away with doing nothing all day.
- gcnnbdff 3y ago
  [dead]
- polynomial 3y ago
  > I've noticed that the higher up the rungs of the corporate ladder you climb, the easier it is to get away with doing nothing all day. Same. Absolutely not in question.
mercenario 3y ago
> Poorly. I did all the work while my friend goofed off and ran personal errands all day You should create your own startup without your friend then.

jongjong 3y ago

Such situations make me furious, but not so much at individuals as at the system. Getting equity in a startup is ridiculously high friction. It's often been a deal breaker for me; not because the founder themselves had personal objections, but because of bureaucratic nonsense such as; it was too much hassle legally or other large investors wouldn't like it, etc, etc... IMO, it should be illegal to launch a limited liability company/corporation and only allow specific people to buy shares. I object to the idea of incorporation and limiting directors' liability to begin with but since it is allowed, at the very least, it should be a requirement under the law that the shares be on the open market such that anyone who wants them can buy them and resell them at any time. The current system is a scam. They can select exactly who gets to ride the ship to the promised land. That's completely wrong, discriminatory and evil.

dheera 3y ago
> it should be a requirement under the law that the shares be on the open market such that anyone who wants them can buy them and resell them at any time. No, I deeply disagree with this. This is the reason we have issues like the 737 Max. Earnings reports and a bunch of idiot shareholders who don't understand a flying hoot about aircraft owning bits and pieces of an aerospace company and exerting control over it and pressure to "beat earnings". I'm very much on board with being generous in giving ownership to employees. But open market? No. F that. Avoid it as long as possible and pay your employees dividends instead.
fendy3002 3y ago
Yeah any startup that pitched me with equity always note that it can only be liquidated during vesting or whatever it is. Though in paper it sounded fair, in my opinion it gives the decision power to CEO too much that I always decline it. And also the equity that they give is based on some valuation that's not even real, it's hard to hold that value of.
- varispeed 3y ago
  I've seen an instance where someone would have to be 3 years at company to be able to cash their shares. He took it as an exchange for lower salary to help company grow. The owners closer to 2 year mark would make his life at company a hell, just so he would quit. He couldn't bear to work there anymore so he left and lost the shares.
  - polynomial 3y ago
    3 years is or at least was absolutely standard. I did notice an uptick in 4 year vests, but not enough evidence to call it a trend.
    - rfrey 3y ago
      3 or 4 years for full vesting, sure - but not to start vesting. A 6 month or 1 year "cliff" where you start vesting a portion of your shares is pretty standard.
fauigerzigerk 3y ago
> IMO, it should be illegal to launch a limited liability company/corporation and only allow specific people to buy shares. I object to the idea of incorporation and limiting directors' liability to begin with but since it is allowed, at the very least, it should be a requirement under the law that the shares be on the open market such that anyone who wants them can buy them and resell them at any time. I don't understand how this could possibly work. If I start a company on my own and I provide all the equity then I own all the "shares". What would it mean for those shares to "be on the open market"? If I'm not selling them then no one can buy them. And if it was a trivial low-regulation thing to create shares and sell them to the public, it would undermine the entire body of regulations they put in place to prevent scams and ensure transparancy. >The current system is a scam. They can select exactly who gets to ride the ship to the promised land. That's completely wrong, discriminatory and evil. No, "they" can not select who gets to ride the ship to the promised land. They can only make an offer that others are free to accept or reject. If I think that my labour makes a huge difference to the success of a company, then I'm not going to provide that labour unless I get a huge chunk of the company. It's a negotiation. I can just walk away and start my own company. And by the way, if you got your wish and limited liability was abolished, then all shareholders would be on the hook for any and all debts the company cannot pay (jointly and severally). That would include employees paid in shares. It contradicts your desire for broad share ownership.
- jongjong 3y ago
  >> If I start a company on my own and I provide all the equity then I own all the "shares". What would it mean for those shares to "be on the open market"? If I'm not selling them then no one can buy them. If you own all the shares initially, it means you get to set the price to whatever you want (and hope that someone is willing to pay that price), or you can just hold them and keep them all to yourself. BUT, if you decide to sell them, you can't just sell them to a specific person over the counter. You'd have to sell on a market so that anyone can potentially buy them and potentially outbid your intended investor. >> And if it was a trivial low-regulation thing to create shares and sell them to the public, it would undermine the entire body of regulations they put in place to prevent scams and ensure transparancy. These regulations are completely useless at preventing scams and it's not the government's job to protect people from scams ahead of time. It's extremely disingenuous to suggest that the government can even know what is a scam ahead of time... Scams like FTX were allowed to grow to billions of dollars and the regulators didn't bat an eyelash until the whole scheme was blown wide open. The only correct, honest way to handle it is that if people get scammed, they can sue the scammer to try to recover as much money as possible. The person who lost the money is partly responsible because they failed to judge the founder's character. >> If I think that my labour makes a huge difference to the success of a company Nobody's Labour ever makes a difference. The success of any project is all about capital, political leverage and media exposure. Let's be honest here. >> And by the way, if you got your wish and limited liability was abolished, then all shareholders would be on the hook for any and all debts the company cannot pay (jointly and severally). That would include employees paid in shares. It contradicts your desire for broad share ownership. I would be fine with that. My strategy would be to only invest in small or medium-sized companies whose founders I can trust and who can manage their risk. The bigger the company, the higher the risk. All of society would be better off if everyone did this. This is not a new concept. It used to be how humans did business for thousands of years. They did just fine, in spite of having very little technology at their disposal. Then finally honesty would be worth something again... It's terrifying how everyone blindly trusts criminals just because the government gave them its stamp of approval.
deleted 3y ago
[deleted]

rgblambda 3y ago

>while my friend goofed off and ran personal errands all day. "A CEO's high compensation is justified by the skills, experience, and dedication they bring to the role." I doubt this is only an issue at startups. I've noticed that the higher up the rungs of the corporate ladder you climb, the easier it is to get away with doing nothing all day.

gcnnbdff 3y ago
[dead]
polynomial 3y ago
> I've noticed that the higher up the rungs of the corporate ladder you climb, the easier it is to get away with doing nothing all day. Same. Absolutely not in question.

mercenario 3y ago

> Poorly. I did all the work while my friend goofed off and ran personal errands all day You should create your own startup without your friend then.