Anders Wang-Rask, CEO at 3B Vision (2011-present)
Répondu il y a 222w · L'auteur dispose de réponses 305 et de vues de réponses 435.6k
What would that world be like?
That would be a chaotic non-functioning world!
My first answer was quick and simple (and accurate) as the question had no detail at all. The original question has been expanded with a bit more detail. In my view, it is very clear that this could not work, and it is not clear how there is an incentive to work as stated simply because people want to own shares in businesses where people want to work.
Here is a list of “open questions” as to HOW this would work. These are few questions from the top of my head. Feel free to answer them if you like.
- So, as a company, I buy parts for £400 to make a product and sell that product to you for £500. After paying overheads (salaries and rent and so on) the net profit on this sale is £20. In this simple scenario the company’s balance sheet increases with net £20. But wait, you now have an equity claim of £500. How does this work?
- As a company, I want to make a smart phone. I buy a processor from Nvidia (who bought a license from ARM), some memory chips from Samsung, a screen from Hitachi, and so on and so forth. I could go on for a while. A complicated product like a smart phone probably have many hundreds sub-components. Each of these components probably have hundreds of sub-components too all shipped around with thousands of different shipping/delivery companies. Today’s economy is WILDLY interconnected. Do I now own equity in all these companies?
- As a company, do I own an equity stake in the employees when I pay them salary for the work? No? How about contractors or personal service companies? No? Where do you draw the line? Services as opposed to physical products?
- As a person, I buy an iPhone with a Vodafone contract at Phones4U. Do I now own an equity stake in Apple, Vodafone, or Phones4U? Do I now directly or indirectly own an equity stake in the effectively tens of thousands of sub-suppliers?
- As a person, if I sell my used iPhone to you on Ebay, do you get an equity stake in me? No? Why not?
- As a person, when I buy £0.20 chewing gum do I get a £0.20 equity stake in Wrigley? (Or the family run corner shop?) No? Where do you draw the line and why?
- As a person, all this equity I build up here, there, and crying-out-loud everywhere, can I sell it? No? Will my wife, children, or next of kin inherit it when I die? Will the government tax the inheritance? At what valuation?
- As a start-up company, I have a great idea. How do I raise investment to get started? Start-ups typically take years to be profitable (if ever) and burn a lot of money in the process. These burn money are always raised as equity, but the old equity system is now gone. And even if it wasn’t, no one would want to invest in equity as they would be diluted when successful and earn nothing.
- How is this practically going to work? There are hundreds of billions if not trillions sell-buy transactions every day. Is this a global central authority with a big computer? A country-by-country central authority? Private companies where you choose to be “listed”? (Do I get to own an equity stake in the company that handles this transaction for me? Yes? Who then handles that transaction? No? Why not?)
- Who is going to pay for all this? One way or another would this cost not end up being added to the prices of all goods? How much more expensive would my £0.20 pack of chewing gum get?
- How much dividend would I really get from Wrigley after having bought that chewing gum pack or from Heinz after having bought that tin of beans? How much would it cost to disperse this dividend? Wouldn’t it cost a freaking fortune to disperse hundreds of millions if not billions of micro-dividends? Should there be a lower limit? Would that not be unfair?
- Would this not just create market lock-in? If I have worked up a stake in Heinz after buying all my beans and ketchup from Heinz for years, I would be a lot less likely to try another company because of my big Heinz stake.
- How will corporate governance work? If a company has hundreds of millions of micro-shareholders, how is any of these individual shareholders exert any power over the board? Would the board not have de-facto complete control in the face of no real strong shareholders and pay themselves such enormously high salaries that there will be no dividend to pay out. Of course, except if we all own them based on the salary they pay themselves. See above.
- Is there anything to stop companies buying their own products? Or make sophisticated swap deals in face of a simple bar?
And so on … I could go on for days.
David Zweifler, Head of Public Relations, Sisense
Répondu il y a 222w
I think a better idea would be to have a set of shares — say, 20% of the total equity — put aside for customers of products that require large group participation to have value (like cellphones). The person who bought the first cellphone would be taking a huge risk — it's an expensive piece of electronic equipment that is essentially worthless until someone else buys one. That person should get a full percent of the company. The second person should get slightly less equity... and so on and so forth, until the 20 percent is allocated to, say, the first million customers. That way, you would create an incentive for early adoption, rather than a disincentive for owners of the business. (Plus, you could always dilute those equity holders in future raises, anyway...)
Graham Horton, Professor, Innovation Consultant, Venture Hacker
Répondu il y a 221w · L'auteur dispose de réponses 1.5k et de vues de réponses 1.3m
1) The company is founded. It has a valuation of 1M$, which is split among the founders.
2) The company does 1M$ in sales. The founders now only own half the company.
3) The company does 2M$ in sales. The founders now only own one quarter of the company. A random set of people has a large enough majority that they can do anything they like with the company.
Marshall Yang, Analyst, MentorTech Ventures. Was Analyst, Robin Hood Ventures and LB Investment (LG's VC). Started SaaS co...
Répondu il y a 222w · L'auteur dispose de réponses 61 et de vues de réponses 58.3k
Making an equity deal takes tons of legal documents. We'll be paying the lawyers much of the profit, if not all, and change.
Warren Myers, unilingual deep generalist; beer nerd
Répondu il y a 222w · L'auteur dispose de réponses 1.8k et de vues de réponses 1.3m
This is the dumbest idea I've heard/seen in a long time.
How do you think this would work? Every time you buy a product your get some kind of share statement in return? You expect the company to generate, potentially, hundreds of millions of "shares", send reports to all these "shareholders", and keep the SEC informed of what is going on?
What about tax liabilities for the "investors"?
Kevin Iudicello, Tech M&A, Former Entrepreneur, Hockey / Soccer Fanatic, Guitarist
Répondu il y a 222w · L'auteur dispose de réponses 176 et de vues de réponses 176.6k
Everytime someone generated a sale it would increase revenue and valuation which would immediately be offset by dilution. No one would ever start a business and most of the motivation of capitalism would disappear. The creativity is great - but terrible idea.