opinion | What if you could donate start-up money to people and not companies?

What if you could tie your cart to an entrepreneurial star? You know someone who is creative and hardworking, and you want to write a check for a piece of whatever that person produces.

It’s hard to find this kind of buggy riding opportunity today. You can invest in a star-founded company, but this is just one project, which may or may not work. You can make a file Income Sharing Agreement With a college student instead of a student loan. But students usually do not have track records, the conditions will be standard and a group of students will be in the ISA pool; You are not betting on a promising person.

Four Russian-born siblings, Danielle, David, Anna and Maria Lieberman, have recently started a project they call humanity This will really allow people to put their money where it belongs when they say “I believe in you”. They have also formed a holding company for their financial interests, the Libermans Corporation. I recommend This story About them in The New Yorker, which is heavy on personal color.

I met two siblings, Danielle and David. I also spoke to a couple of economists (of course) and another Silicon Valley businessman who heard Lieberman’s suggestion.

I don’t know if the idea of ​​humanity will last, but it’s interesting. Sam Lisin, a serial entrepreneur and former vice president of product management at Facebook, wrote last year in Article – Commodity About the concept in the information.

According to a Liebermans spokeswoman, slow projectsa venture capital firm where they are not a general partner, invested $3 million in the company last year for approximately 1 percent of the stock.

The Libermans are supposed to hold all ventures that family members may start until May 2051. (There are cuts to previously acquired wealth; up to $300,000 in salary, bonuses, and the like, per person per year; real estate and other passive investments such as publicly traded securities that It can be kept outside the holding company.)

Essentially, the four made themselves a test case for the concept of humanity. They say they are negotiating with the Securities and Exchange Commission about issuing stock in their company and hope to get a permit next year.

Daniel and David tell me that the company generated $14 million in net income in its first year of operation. Its main asset so far is Product Science, a company set up by the siblings that accelerates mobile apps.

Lieberman raised money in two rounds equal to just under 3 percent of the stock, and the stock price in the second round gave it an implied valuation of $400 million, the brothers say.

One of the reasons people want to invest in the Lieberman family is that they have already shown entrepreneurial flair. They built an augmented reality startup, Kernel AR, which they sold to Snap, owner of Snapchat, in 2016. At Snap, the siblings oversaw an animation studio and worked on 3D Bitmoji, according to the 2018 Times. Article – Commodity.

Governance is a difficult issue for Lieberman. Investors get a proportionate share of any wealth the siblings create, but they have no say in how they allocate their time and effort. They can’t claim dividends either. Lieberman decides when to spend some cash, at which point all investors will receive a proportionate share of it.

Their concept is much better than that of Mike Merrill, the entrepreneur who in 2008 split himself into 100,000 shares and tried to sell them for $1 each. As told in hilarious Article – Commodity At Wired in 2013, Merrill gave investors a vote on his life decisions, including whether to have a vasectomy.

There is some risk that Libermans will take the money they raise and retire to shore, because investors have no say. The siblings believe they have solved this problem by restricting outside investors to a maximum of 10% ownership. Since they hold 90 percent, Lieberman will often hurt themselves by shirking their duties.

Daniel and David tell me that their concept of humanity is a natural fit for Silicon Valley, where it has already become the norm for angel investors and venture capitalists to choose investments based on faith in entrepreneurs. “People, not projects” is a common slogan.

They said the humanity deal could be better for entrepreneurs and inventors as well. Investors may give money on more favorable terms because the risk is lower. Even if most of the business’s lifetime projects explode, one or two winners can make up for it. In return, investors will demand stricter terms – more shares for a certain amount of money – to invest in any given startup because they are making a diversified bet. They will lose their investment if it is one of those bombs.

Venture capitalist Lissen cites another advantage: he gets the money into the hands of young people, who are often rich with the idea but cash-poor. “Unless young people can tap into the value of their natural stock, we will forever be at the mercy of our old,” he wrote in The Information.

Sam Altman, a serial entrepreneur, told me he was interested in any financing innovation that would “allocate capital more efficiently to people who could possibly do incredible things with it.” “I’d love to see the trials happen on a larger scale,” he added.

But Altman, the former head of Y Combinator, itself an innovative startup funding organization, said he would be more comfortable investing in companies rather than individuals. Suppose that perhaps investors could give entrepreneurs money up front in exchange for the option to invest in a company they might start later.

I also interviewed Daniel Herbst of the University of Arizona and Nathaniel Hendren of Harvard University, who wrote last year paper On human capital financing. They said that being able to sell a share of a lifetime income stream would be invaluable to someone who was trying to start a business without a track record. But for reliability, Libermans naturally focus on people with a proven track record. These people don’t need Lieberman’s system as much because they have other ways to raise money.

The result, they said, is that the people who need it most are not qualified, and the people who do need it less.

About your Wednesday the news About the energy crisis in Europe, why are we still talking about the storage and storage of gas and oil? Why not talk about a healthy transition to 100 percent renewable energy at affordable prices that doesn’t include nuclear, no matter where the nuclear plant is – definitely not in a war zone!

Connie Anderson
Frisco, Colo.

“Quakers, more than any major Protestant denomination, promoted the way of life that Max Weber called earthly asceticism—the idea of ​​living in the world but not of it. Work became a secret, unemployment a mortal sin.”

– David Hackett Fisher, “Albion Seeds: Four British Folkloric Ways in America” ​​(1989)

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