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0 pointsmch823y ago0 comments

> The employees have dramatically less incentive than the owners and management to earn the owners an adequate return on their investment.

What has led you to this conclusion?

I’ve observed the opposite to be true: employees have more incentive than investors to seek the long-term success of a company. Building a career within a company and industry requires an investment of time and effort. Career changes are slow and become increasingly difficult. In contrast, investors can invest in anything so investments are more liquid than careers. In the case of a company failure, well managed investment portfolios are exposed to significantly less risk than the typical salaried career.

0 comments

erlich3y ago

> Long term success

Employees concept of this is not aligned with investors. Investors need a return on investment. It’s not enough for them to have a moderately profitable company with happy employees. They need a big exit event that fits their investment characteristics.

And this is fair because then accepting VC money gives them an advantage over their competitors who might have bootstrapped. We shouldn’t feel sorry for employees of a heavily VC funded company, but by their bootstrapped competitors trying to compete.

We shouldn’t try to protect employees with high salaries at entrenched big tech companies. We should allow entrepreneurs to create new companies to challenge them which is better for society. It’s better to have less monopolies and it would be better if one high salary was split in two due with someone from a smaller competing company. This is better for the labor market.

Apocryphon3y ago

> It’s better to have less monopolies and it would be better if one high salary was split in two due with someone from a smaller competing company.

But the VCs whose needs you are arguing for are the ones who are seeking those monopolies, at least in tech. With the advent of blitzscaling as a preferred strategy, we are seeing VCs who are seeking to create monopolies and own markets from the start. So why do you feel sorry for those investors? They burn plenty of money, and if they lose money on one company, they have plenty more in their portfolios.

And if unions are truly as detrimental to the system as you claim, then perhaps it is good if they arise in VC-hyperfunded startups, because then they will thwart these nascent monopolies, and allow bootstrapped companies more of a fighting chance.

Your narrative contradicts itself.

> We should allow entrepreneurs to create new companies to challenge them which is better for society.

The existence of unions would not poise a challenge to entrepreneurship.

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