[csa]

The ideas you’ve laid out sound really good while theorycrafting over some drinks.

The reality that I’ve seen is that it rarely works out like you are suggesting.

Real examples that I’ve seen twice in detail is that senior management (and later retired management) ends up with a lot of shares. Upper management prefers disbursements/dividends, while lower-paid folks prefer pay increases. Sometimes neither of these are optimal — better to re-invest.

The senior management and retirees do everything that they can to minimize share dilution, and they are very aware of where their share of voting shares stands versus the labor shares, and the management is much more savvy about this knowledge and process.

Bitterness on both sides ensues, and the company turns to shit via in-fighting.

As for getting new folks to invest their own money into shares, there has to be a very clear path for ROI for these folks, as often there is no dynamic market for shares.

Other examples I’ve heard stories about (but haven’t seen numbers) have similar tensions.

Maybe I’m biased, because I mostly hear about failed employee buyouts. That said, the number of success stories I’ve heard of are few — bobs red mill (still newish) and Publix… I’m sure there are a few more.

[righthand]

Force people to sell when retiring and cap share ownership. I’m not suggesting a blanket single approach to each and every out lying problem you may encounter but I am saying the general idea of employee ownership could work out better than risking everything on a potential VC success story.

When creating an employee owned company these are great things to consider when drafting the agreement but I didn’t read anything from your anecdotes that suggests it wouldn’t be a successful model.

My comment was never about the employee base package requiring investment from the hired employee. I was commenting on offering the base and an additional package for bringing on an investor employee.