Setting aside shares upfront and raising capital are but two examples of tried and true ways. Do you think there is a reason that these two methods have been commonly used in the capital markets for decades, while outright dilution has not?
Completely and provably false. see post:
https://bitsharestalk.org/index.php?topic=4713.msg61701#msg61701There is another problem with dilution strategies that has not really been discussed. That is the following: who will decide exactly how the funds are allocated and used? Which employees get the spoils, and how much they get? Who will decide how much to spend, and on which projects? Which marketing initiatives or infrastructure projects should get priority?
Yes, as I said in my previous post, a smart dilution algo with the right incentive structures is not an immediately obvious problem to solve... it's "not easy" And that's why it's such a big deal that BitShares is on the verge of cracking the nut.
I submit that the following algo works and creates the right incentives:
Employees are elected by "approval voting." Along with your "approval" you indicate an appropriate annual salary in bips (gets paid out daily). Only an employee with over 50% support of stake ends up paid. Their salary is the median voted by stake (people who did not vote for the employee are included in the median as voting for a "0" salary).
Any "inactive stake" (no transactions for over 1 year and paid inactivity penalty) should be removed from the voting algorithm. Stake may voluntarily "abstain" and thus remove their stake from the voting algorithm.
https://bitsharestalk.org/index.php?topic=4660.0It will be governance by the masses
uh... it's governance by the shareholders... the only governance that makes any sense.
It seems that you think that a diffuse group of shareholders can coordinate effectively on the best way to invest and to compensate employees. That seems awfully naive.
yea... except that's how every single company works.
Every company is ultimately governed by the shareholders; the shareholders elect the board of directors, they can fire the CEO and vote on his comp plan. They can hire people to make informed decisions on their behalf but the "the diffuse group of shareholders" are ultimately the ones who voted in the leadership and call all the shots.
Investors are capital-providers. They are not managers.
Wrong again. If you think your job is done as soon as you write the check, in most cases you can kiss that money good-bye. You, as the shareholder, are responsible for your investment. You abdicate this responsibility and power to your own peril.
You seem to somehow acknowledge that investors are smart enough to find a capable trustworthy developer (such as bytemaster) and fund this developer. And yet as soon as they do this they all of a sudden become incompetent idiots who can never be trusted to make a smart decision again.