

Would it make sense to give equity to your users when they invite lots of other users? - amichail


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nostrademons
Man, this'd be a legal nightmare if you ever needed to take funding or make
important decisions. (Disclaimer: IANAL, but I just met with one, and spent a
lot of time and a good chunk of change dealing with having too many founders.)

Problem is, there are many decisions - like taking investment, or big partner
deals, or top management changes - that require shareholder consent. If you
have lots of non-involved shareholders, you've gotta send out shareholder vote
notices to all of them and hope they come back. Without the signatures, you
can't do anything.

Plus, if any of your shareholders have a conflict of interest (say, your
product falls under their IP agreement), you potentially have a legal problem
on your hands.

You can ameliorate this somewhat with a voting trust or various other legal
arrangements that I know little about. Check with a lawyer to make sure. But
it just sounds like a really bad idea to me.

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s_baar
I don't know if it would make sense, but Cambrian House set up a co-op so that
they could do this. It owns 1% of the company and is made up of 2 ch employees
and 3 community members. If you need more info, you should contact them and
I'm sure they'd be happy to explain it to you.

