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> “Why do people feel perfectly comfortable forming a startup when they know that 90 percent of them fail? Because they know that corporate laws and bankruptcy
by oskarth 11y ago
> “Why do people feel perfectly comfortable forming a startup when they know that 90 percent of them fail? Because they know that corporate laws and bankruptcy laws protect them from personal liability. They know that they won’t lose their house if the company goes bust.”
This is a intellectually dishonest statement. Even if you had no laws you would still be able to find investors willing to invest in an company, with the understanding that it could fail. The very concept of "personal liability" only makes sense inside a regulated society.
Hypothetically speaking, living in a everything-goes society, it's true you might get killed or have your house burned down - but that's only if you are bad at PR, communicating expectations, or self-defense.
In fact, a lot of people did just this earlier in history. The main reason startups are more successful now is because of the leverage technology provides. That and the fact that, for the most part, government/bandits don't take the money you get for creating wealth. Stability plays some role too, but there has been plenty of stable societies that didn't have anything resembling startups, and a lot of startups thrive in macro-economically unstable climates.
EDIT: Of course, the above hypothetical scenario is not prescriptive, i.e. it's not desirable. It's simply an extreme example that illustrates why Mr. Regulator's statements are wrong and intellectually dishonest.
- nemo 11y ago"that's only if you are bad at PR and communicating expectations, or self-defense." Without the stability of rule of law in a reasonably regulated state, self-defense is incredibly difficult in the modern world, with modern technology allowing for sniper shots at greater than a kilometer. The illusion of security is simple, but actual security is not. Most normal people would rather live in a society where they didn't have to worry about PR, communicating expectation, and careful security with the knowledge that the more they had the greater the risk of mortal peril. Not that I wouldn't mind some people trying it somewhere to illustrate the failings of simple-minded idealism graphically as Marxists did, so long as it was a small-scale human failure.
- Animats 11y ago"Even if you had no laws you would still be able to find investors willing to invest in an company, with the understanding that it could fail." The problem is collecting if it succeeds. Shared ownership requires a legal structure. Without it, businesses are mostly owned by a single person, family operations, or one-shot high risk transactions.