5 ms·

That's an amazing idea. What would it take?

• troels 13y ago
  For one thing, you'd have to trust the people that you pool with by quite a stretch.
  • apercu 13y ago
    Great idea, in theory. But even if you simply shared equity across, say, a 20 or 30 person company. The agendas, the politics, the perceived golden handcuffs because of equity ownership. Hard to start a business with 20-30 people. Even if those are your 20 best friends. Now multiply this across dozens of companies. Plus, most startups give options, not equity unless you are a very early employee.
    • danieltillett 13y ago
      I think you get most of the benefit of diversification with as few as 8 stocks [0], so if you kept each of the pools small you could avoid a lot of the scaling issues. [0] http://en.wikipedia.org/wiki/Diversification_(finance) http://en.wikipedia.org/wiki/Diversification_(finance)
• danieltillett 13y ago
  A YC application - lets call it poolr :) More seriously there is a number of ways of doing this. I would imagine the simplest would be to create a trust and have everyone give their equity and options to the trust. The bigger issue is how to ensure that people don't game the system. The assets being put into the pool need to be accurately valued so people don't put in what they know are worthless assets. Of course there is there is the reverse situation where those already in the pool undervalue new assets. Most of the effort of this idea needs to go into setting up the rules so that everyone does the right things and everyones interests are aligned. While I think this might be hard, I don't see anything that can't be solved by some smart people.
  • bksenior 13y ago
    A simple voting mechanism would work where you announce the shares you own to the pool you want to join.
    • danieltillett 13y ago
      Yes this might work - you could also have a bidding process where you put up your shares and the various pools can bid on them.
      • aamar 13y ago
        Derisking makes economic sense, but incentive stock options are mostly nontransferable. You're describing a market for shares of a privately held company, which the SEC doesn't want (except through some very specific protocols like JOBS Act crowdfunding).
        • danieltillett 13y ago
          The stock or stock options aren't really being sold as such, just given to the pool. I am wondering if the pool members could continue to hold the options, but enter into a secondary agreement to share any gain with their fellow pool members. This would be a derivative of some sort I guess.
          • msandford 13y ago
            The problem is that when a company goes big and someone gets a good exit they personally own that money until they make good on their secondary agreement. It would be easy to rationalize that it was specifically their personal hard work that helped make the company succeed. And since it's their money they have a big enough war chest to fight giving it to the pool. Or they can just skip the country. If the payoff is big enough there are plenty of folks who wouldn't mind trashing their reputation. And then that's the end of the pool. Don't get me wrong, it seems like an interesting idea. I would love to have some way for my un-diversified work portfolio to get diversified. But short of creating a sweat equity only market/exchange I don't really know how you'd do it. Even that has problems because people could fake a startup well enough to gain access to the returns creating a free-rider problem. It's probably easier to cook up a bunch of buzz and interest over an orchestrated 3 month campaign (esp. with a Kickstarter) than to actually do a startup. And since you're faking it you can promise the world and raise huge money from unsuspecting dupes with no intention of (much less a plausible method for) making good on your promises.