News for hackers. Stuff that matters.
Re:The Collison Brothers Built Stripe into a $95B Unicorn by majormajor on Thursday May 26, 2022 @09:17PM (#31525138)
I don't really follow your examples, but I think there's a part of startup comp structures that's worth calling out in general. Equity distribution ratios are way different than salary ones.

Your boss in a mature company may make 20% more than you, give or take. Your boss in a early stage startup may have 10x (or more!) more equity than you. Even if they don't have 10x to lose.

Re:The Collison Brothers Built Stripe into a $95B Unicorn by lifeisstillgood on Friday May 27, 2022 @02:45AM (#31526697)
Yes I think that is more or less what I am talking about.

In a democracy the tendency is towards fairer equitable distribution of wealth (why FDR was called a traitor to his class, why Jim Crow laws exist etc).

It is one factor in why companies are not democracies- but I think (hope?) we may see much experimentation in democratic decision making to try and make it as speedy as hierarchical companies

(hmm - there is likely to be a speed / stability / waste trade off here?)

Re:The Collison Brothers Built Stripe into a $95B Unicorn by chii on Friday May 27, 2022 @03:37AM (#31527003)
> It is one factor in why companies are not democracies

societal democracy works because everybody is born into a society equally.

A company democracy doesn't work because not everyone is "born" into the company - the founders are more born, since they put up initial capital. If the employees also put up capital, they will get an apportioned vote.

So a company _is_ a democracy, but the votes aren't tied to lives like in society, but tied to capital. Each dollar buys you a vote.

Re:The Collison Brothers Built Stripe into a $95B Unicorn by tsimionescu on Friday May 27, 2022 @03:56AM (#31527112)
This values capital over labor to a far too large extent. The value of a (successful) company is overwhelmingly dominated by labor - including the labor of the founders and CEOs, to be clear - not by original capital investments. But, ownership is only afforded to those who contribute capital, and ~0% to those contributing labor (this does vary between companies, as some do offer equity as part of the labor contract, but typically only to certain employees; its very unlikely the cleaning person will be offered any equity, for example).
Re:The Collison Brothers Built Stripe into a $95B Unicorn by chii on Friday May 27, 2022 @04:27AM (#31527302)
> The value of a (successful) company is overwhelmingly dominated by labor

but those labour only decided to contribute their labour because they are guaranteed a wage - which is capital being spent.

If you put up a job offer, where your wage is tied to the profitability of the business (aka, if you worked but the business didn't make any revenue or profit, you don't get paid), then you'd find that there aren't many who would take this offer. It is this property of equity which makes capital more powerful.

you could artificially raise the power of labour by fiat law. But this law would distort the capital being spent - you might even find capital flight, if the law is very skewed towards labour.

Re:The Collison Brothers Built Stripe into a $95B Unicorn by tsimionescu on Friday May 27, 2022 @06:25AM (#31527934)
> but those labour only decided to contribute their labour because they are guaranteed a wage - which is capital being spent.

That's only capital being spent if the company is not profitable. Otherwise, it's just reinvesting revenue back into the business. And a company that is going bankrupt may well become unable to pay employees' promised wages, which does happen occasionally.

> If you put up a job offer, where your wage is tied to the profitability of the business (aka, if you worked but the business didn't make any revenue or profit, you don't get paid), then you'd find that there aren't many who would take this offer.

While there are definitely people who are not happy with this kind of arrangement, it's not entirely unheard of either. Early stage start-ups often hire people on equity instead of wages; and co-ops where all (or most) workers are owners and only get paid if the business is successful also exist.