> Why does no one run a completely employee owned tech company. What is the disincentive for modeling your company as employee-owned and operated. It seems that

> Why does no one run a completely employee owned tech company. What is the disincentive for modeling your company as employee-owned and operated. It seems that would be the best path to an efficient company and a focused company that’s not angled to be taken over by outside aggressive for profit interest and dismantling. It is very tough to pull off an employee-owned company over the long term. 1. How do you handle it when someone leaves? How do you handle a new employee when they come in? There are many ways to do it, but I don’t think I’ve seen an implementable way that keeps incentives aligned. 2. What happens when the company is extremely successful? In many examples I have seen, the employee-owners give themselves substantial raises and/or distributions, become way better off than they ever expected, then they aren’t really motivated to do the hard things that make a business work over the long run. Source: A friend of the family who buys up employee-owned SMBs, gets them back on track, and then sells them. Note that often times the “employee buyout” is a founder/owner who can’t sell at a price that they like, so they basically sell it to less sophisticated buyers (their employees).