- distrust, how would I know I'm awarded fairly? who decides that? lets say I worked on something I was good at, i.e. I made a logo or I designed database schema. how much should I get?
- accountability, this company gave 50 people its shares, where are they now? are they just vesting? why should I bother with that baggage? is there mechanism to dilute inactive participants? how much? who decides that?
- fair accounting
it's a legal challenge but also more of a logistic challenge.
Imagine if there was crowd/democratic way to build companies:
- people can join and leave
- people shouldn't be able to game or take over the equity grants
- people should be awarded appropriately
- system should be able independently track cost and revenue
I wish it could be done in a non-centralized way but I think there is no avoiding it, unless some legal framework is created by the govt, an entity/org that will work for very broke startups too.
I dont know the right answer but here is what I propose:
Create a non-profit org who maintains and runs the system. Least involvement the better.
- anyone can start a project/company at this org.
- first person(s) create list of roles, they interview all of them and vet.
- once they have vetted and gotten 12 people interested, the org issues in-game currency of 1 million
- this 1 million gets divided to all 12 people equally
- lets say someone is working FT on project and requests higher %, they can propose dilution of others and 70% equity holders must agree.
- there is a task nobody knows how to do they create a public request, and people get paid in game currency and gain equity.
- if one day company starts generating money, the non-profit takes the revenue, distribute it according to equity.
- if company incurs loses then non-profit waits for the company to cover it
- company decides to sell shares/currency, remember it's 1:1, so they say we are selling $10k worth of equity/currency. And that gets deposited to company's bank.
ISSUES:
- how to address problem of formerly active members/shareholders...
-- Maybe if someone was involved before company had revenue they get privileges that people who contributed after revenue don't.
-- You can't track this with GIT commits or something, what about someone sharing the site to their 5M twitter followers, that's immense value.
-- What about senior founders abusing system as a gang?
This can't work unless the system takes care of things automatically, acting as a third person is just asking for trouble.I think open source and MLM are inspiration for this model. MLM gets an army of people to work for common goal, although it's a scam.