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When investing, I always ask myself the question, "Does the CEO/founder/leadership team have the same incentives I do to make the company succeed?" Dual class
by cl42 3y ago
When investing, I always ask myself the question, "Does the CEO/founder/leadership team have the same incentives I do to make the company succeed?"
Dual class share structures, special warrants (very common in SPAC days), etc. all misalign later shareholder incentives with leadership incentives. As a rule, I avoid such investments.
I wish such incentives were (a) clearer to see in many cases, and (b) not as common as they are.
- dpflan 3y agoAre those incentives able to be gleaned from or stated in the S-1?
- cl42 3y agoFor public companies, I believe that's the case, yes... Though I have to admit that sometimes the terms are so convoluted that they're very hard to follow or understand.
- s1artibartfast 3y agoThe CEO will make 200 million if they hit a $90 share price milestone. Is that clear enough?