3 ms·

>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

>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. So if I was looking for someone who would build a company with me, someone who would take on an entrepreneurial role, provide expertise, labour or personal connections, I wouldn't be allowed to do that. I wouldn't be allowed to give shares to employees in exchange for labour either. Nor would there be any family businesses. >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. Capital is a factor that leverages and buys labour. Without labour the result of this equation is always zero. Without a product or service you have no customers, regardless of how much free media coverage you may be getting (for whatever reason). >My strategy would be to only invest in small or medium-sized companies whose founders I can trust and who can manage their risk. Good luck with that. Personal trust is not a replacement for limited liability though, especially not if shares are publicly traded. How would a creditor decide how much to lend to a company if the personal assets of all shareholders are used as collateral? If I owned shares in Microsoft, would I have to provide a payslip and a bank statement to Microsoft's bank? Would they do a credit check? And if I sold my shares, would Microsoft have to pay back part of a bank loan if the buyer's net worth was less than mine? I don't think you have thought this through.

navane 3y ago
>>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. >So if I was looking for someone who would build a company with me, someone who would take on an entrepreneurial role, provide expertise, labour or personal connections, I wouldn't be allowed to do that. I wouldn't be allowed to give shares to employees in exchange for labour either. Nor would there be any family businesses. A good market is an open market. If you look for someone with "certain expertise", you can offer that for money, while at the same time putting shares of your company on the market. The person could then buy the shares for money, and you can give him that money for his "expertise". But if someone else outbids that person on the shares, he will still get the money, but someone else gets the shares. If the person ONLY wants to work for those shares, and not for money, he will have to outbid the market price. If he doesn't want to outbid the market price, and you agree with that, you actually want to give him shares for free.
- Gooblebrai 3y ago
  I prefer the world where I can decide who I sell shares to. If my investors are going to bug me over returns eventually, I prefer to have control on who they are rather than leaving it to strangers in the open market that may be misaligned. That's one extra reason many companies don't go public nowadays.
  - jongjong 3y ago
    You're looking at this wrong. The investor could just sell their shares to the market with minimal disruption to your business if they don't like your approach.
- fauigerzigerk 3y ago
  So I would be allowed to give shares away for free. That's progress :) I still think that this idea is wholly unpragmatic. It would prevent all strategic partnerships where the value provided is only partially financial.
jongjong 3y ago
>> If I owned shares in Microsoft, would I have to provide a payslip and a bank statement to Microsoft's bank? Would they do a credit check? And if I sold my shares, would Microsoft have to pay back part of a bank loan if the buyer's net worth was less than mine? No, the company would still do its own accounting with its own income, balance, cashflow ledgers... Banks would have to look at the company's net assets to loan against. If the company goes bankrupt, however, and the bank cannot recover the collateral from the company itself, then it should be allowed to pursue the shareholders (who would be liable in proportion to how many shares they hold). Another major difference would be that if the company was negligent or committed a crime, then all shareholders could potentially be held personally liable to some extent. IMO, purely passive investing should not be allowed. The shareholder should be responsible for staying up to date about what their company is doing.

navane 3y ago

>>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. >So if I was looking for someone who would build a company with me, someone who would take on an entrepreneurial role, provide expertise, labour or personal connections, I wouldn't be allowed to do that. I wouldn't be allowed to give shares to employees in exchange for labour either. Nor would there be any family businesses. A good market is an open market. If you look for someone with "certain expertise", you can offer that for money, while at the same time putting shares of your company on the market. The person could then buy the shares for money, and you can give him that money for his "expertise". But if someone else outbids that person on the shares, he will still get the money, but someone else gets the shares. If the person ONLY wants to work for those shares, and not for money, he will have to outbid the market price. If he doesn't want to outbid the market price, and you agree with that, you actually want to give him shares for free.

Gooblebrai 3y ago
I prefer the world where I can decide who I sell shares to. If my investors are going to bug me over returns eventually, I prefer to have control on who they are rather than leaving it to strangers in the open market that may be misaligned. That's one extra reason many companies don't go public nowadays.
- jongjong 3y ago
  You're looking at this wrong. The investor could just sell their shares to the market with minimal disruption to your business if they don't like your approach.
fauigerzigerk 3y ago
So I would be allowed to give shares away for free. That's progress :) I still think that this idea is wholly unpragmatic. It would prevent all strategic partnerships where the value provided is only partially financial.

jongjong 3y ago

>> If I owned shares in Microsoft, would I have to provide a payslip and a bank statement to Microsoft's bank? Would they do a credit check? And if I sold my shares, would Microsoft have to pay back part of a bank loan if the buyer's net worth was less than mine? No, the company would still do its own accounting with its own income, balance, cashflow ledgers... Banks would have to look at the company's net assets to loan against. If the company goes bankrupt, however, and the bank cannot recover the collateral from the company itself, then it should be allowed to pursue the shareholders (who would be liable in proportion to how many shares they hold). Another major difference would be that if the company was negligent or committed a crime, then all shareholders could potentially be held personally liable to some extent. IMO, purely passive investing should not be allowed. The shareholder should be responsible for staying up to date about what their company is doing.