Will Code for Equity
Finally an answer to the age-old (at least the past 20 years or so) conundrum of how to get your start-up off the ground if you're a hustler with no money or programming skills, or you're a coder with no idea how to run a business. This gave me one of those, "Why didn't I think of that?" moments when I read it.
Late Labs is the latest crowd-coding website, but this one comes with a twist: it's a crowd-coding site where coders can pick the project they want to work on and receive equity in the company when their code is accepted. The company is then managed from start-up to (hopefully) exit by Late Labs.
In that sense, it's not ideal for a really hands-on entrepreneur, because you'll be signing away a lot of the direction of your company. But for someone who just has a really cool idea and no real execution plan, it might be the perfect solution.
It's obviously more advantageous to the coder looking for a side project, or projects. Sure, there's a risk that your equity will never be worth anything (a statistically significant risk), but it all looks good on the resumé, it enhances your chances of being hired full time by the company if it does take off, and then there's always the minuscule chance that you're coding a module for the next Facebook.
I've always been a big fan of collecting equity. I've got a pretty healthy stack of worthless stock certs in my office, but I enjoyed acquiring every one of them. Perhaps my favorite is my stock in International Brewing & Manufacturing, Inc., the company who installed (with my actual physical help) all the brewing equipment in the original Pizza Port in Solana Beach.
Even though they went tits up shortly after that, I've had a few that worked out and they've helped keep me in the lifestyle in which I'm accustomed. Needless to say, I'm a big fan of equity.
What do you guys think of the concept? Would you spend 100 hours grinding out code for some equity in a start-up? If you're an idea guy, would you be willing to let someone else take a crack at executing your idea if it meant you only retained 5% equity (but all you gave up was the idea itself)? Is it worth the risk for the potential payoff?
Comments
Eddie, Love the image. How
Eddie,
Love the image. How Tech Bubble. That said, I think that if I had a great idea and no way to execute it myself, it would be an option to seriously consider. Like you, I'm a firm believer in equity but I think that it's a reasonable tradeoff if you are having someone else provide the bulk of the labor, sourcing and management. Then again, I dislike not being able to have any control over my idea. This is definitely something I'll keep an eye on though. Even if I don't retain full ownership of my idea, a 5-10% stake in a project is still worth something whether the project crashes and burns or not.
Frieds, I just wonder about
Frieds,
I just wonder about the peptic ulcers a huge success would cause. Imagine, for example, you had the idea for Twitter and gave away 95% of the equity to have someone else execute. You're still gonna be rich, but IPO day has to be pretty bittersweet when you get a check for $50 million but some other jamoke in a hoodie gets one for $1.6 billion. Or am I wrong? That's the one thing I wonder about.
Edmundo Braverman: Frieds, I
Frieds,
I just wonder about the peptic ulcers a huge success would cause. Imagine, for example, you had the idea for Twitter and gave away 95% of the equity to have someone else execute. You're still gonna be rich, but IPO day has to be pretty bittersweet when you get a check for $50 million but some other jamoke in a hoodie gets one for $1.6 billion. Or am I wrong? That's the one thing I wonder about.
This sounds vaguely familiar.
- Tyler Vinklevoss
Check out my Blog
Unforseen: Edmundo
Frieds,
I just wonder about the peptic ulcers a huge success would cause. Imagine, for example, you had the idea for Twitter and gave away 95% of the equity to have someone else execute. You're still gonna be rich, but IPO day has to be pretty bittersweet when you get a check for $50 million but some other jamoke in a hoodie gets one for $1.6 billion. Or am I wrong? That's the one thing I wonder about.
This sounds vaguely familiar.
- Tyler Vinklevoss
LMAO
im a lil confused...if u have
im a lil confused...if u have a cool idea, how is posting that cool idea on some website not a rookie move ? wats to stop someone from just takin that idea and run with it themselves ?
tech bros gotta protect their intellectual capital
You have to play the game to find out why you're playing the game.
Great concept and idea. There
Great concept and idea. There are many people who can see Point A to Point C, but can't figure out Point B (or don't have time). For 5%, yes you lose a lot, but at the same time you don't have to do any of the grunt work. For best or for worst, especially if you still want to be heavily involved in the process.
Going Concern: im a lil
im a lil confused...if u have a cool idea, how is posting that cool idea on some website not a rookie move ? wats to stop someone from just takin that idea and run with it themselves ?
tech bros gotta protect their intellectual capital
You don't actually post it on a website for all to see, you share it exclusively with Late Labs and if they think it's an executable idea and they accept it, you get 5% equity. Once they've decided to launch a company with your idea, they then put it out to the coding community to get whatever it is built. Hopefully that clears it up.
Edmundo Braverman: Going
im a lil confused...if u have a cool idea, how is posting that cool idea on some website not a rookie move ? wats to stop someone from just takin that idea and run with it themselves ?
tech bros gotta protect their intellectual capital
You don't actually post it on a website for all to see, you share it exclusively with Late Labs and if they think it's an executable idea and they accept it, you get 5% equity. Once they've decided to launch a company with your idea, they then put it out to the coding community to get whatever it is built. Hopefully that clears it up.
hmmmm....well two follow ups
1) legally speakin, what is protecting your idea once u give it to late labs? like whats to prevent them from sayin ur idea is junk and then 2 weeks later one of their employees quits and takes that idea and starts up a company w/ it entirely on his own? maybe i need to watch social network again...
2) where will these late labs fellas be gettin all the $$$ to start up all these companies?
You have to play the game to find out why you're playing the game.
Edmundo Braverman: You're
You're still gonna be rich, but IPO day has to be pretty bittersweet when you get a check for $50 million but some other jamoke in a hoodie gets one for $1.6 billion.
Fuck it, sign me up for the $50MM. Sure a BAZILLION would be cool, but 50MM is still more than most people will ever see. Literally everytime someone says they're putting a business together I offer to help out because:
(1) I really am that nice
(2) I learn something new
(3) That off chance of pocketing a few bucks is worth the few hours
Truthfully, 5% seems terribly low, it's the type of cut I'd expect from the mob, and I'm not sure what caliber of startup / crew they think they're going to attract for that pittance. The only time I ever watched SharkTank, some dude flat out told the panel "NO, I'm keeping 60% of my company because it's making money and I'll still grow without you" and they eventually caved to all his demands: that's the type of business I'd invest actual money in. But that's me.
I just had my first UFO experience.
I called my wife fat while we were making dinner.
Flying saucers everywhere XD
Going Concern: Edmundo
im a lil confused...if u have a cool idea, how is posting that cool idea on some website not a rookie move ? wats to stop someone from just takin that idea and run with it themselves ?
tech bros gotta protect their intellectual capital
You don't actually post it on a website for all to see, you share it exclusively with Late Labs and if they think it's an executable idea and they accept it, you get 5% equity. Once they've decided to launch a company with your idea, they then put it out to the coding community to get whatever it is built. Hopefully that clears it up.
hmmmm....well two follow ups
1) legally speakin, what is protecting your idea once u give it to late labs? like whats to prevent them from sayin ur idea is junk and then 2 weeks later one of their employees quits and takes that idea and starts up a company w/ it entirely on his own? maybe i need to watch social network again...
2) where will these late labs fellas be gettin all the $$$ to start up all these companies?
To answer your first question, I would posit to you the "poor man's patent". In the old days, if you had a really cool idea you could write it down on a piece of paper (obviously in as much detail as you could muster) and then mail it to yourself. It would obviously be postmarked by the US Post Office with a date. If someone stole your idea from that point, you could sue them and use the unopened letter as evidence that it was your idea. The judge would look at the postmark, open the letter and read your idea, and then decide if it was stolen. Believe it or not, this worked many many times over the past century. I guess the modern day equivalent would be the time and date stamp on the original email you sent to Late Labs. I sure wouldn't wanna have to rely on that in court, but at least it's something.
As to your second question, it looks like they're starting out with just one company to iron out the bugs. They're giving coders three companies to choose from and the one that gets the most action from the coders will be the one they develop first. Obviously this is an infant-stage execution platform, but I think it's a pretty interesting one. If the first one goes well, I think they'll have to beat the angels off with a stick.
This seems like a great idea,
This seems like a great idea, I am interested and will signup, and hopefully be able to do some coding. However, the criticisms against this platform have been valid.
Edmundo Braverman: Frieds, I
Frieds,
I just wonder about the peptic ulcers a huge success would cause. Imagine, for example, you had the idea for Twitter and gave away 95% of the equity to have someone else execute. You're still gonna be rich, but IPO day has to be pretty bittersweet when you get a check for $50 million but some other jamoke in a hoodie gets one for $1.6 billion. Or am I wrong? That's the one thing I wonder about.
This will be the limiting factor for this company, as this is adverse selection at its finest. Who would give up a phenomenal idea for 5%? I wouldn't.
I'm a lover, not a fighter, but I'm also a fighter, so don't get any ideas.
My WSO Blog
i have an idea: a sporty car
i have an idea: a sporty car that runs 100mpg with great maintenance and handling.
if someone would execute this for me i'd be happy with 5% equity.
Taking funding for my new
Taking funding for my new start-up idea: Early Labs.
Early Labs is a crowd-ideating site where idea people can pick the idea they want to work on and receive equity in the company when their idea / product is accepted. How it works is that dreamers submit dreams of what they want solved, Early Labs curates those dreams and only presents the best dreams to ideaters, who then work on turning those dreams into ideas. Dreamers get 5% equity in an accepted dream and ideaters get equity depending on the piece of the dream they idea.
Early Labs then submits the idea to Late Labs and hopes for the best.
freeloader: Taking funding
Taking funding for my new start-up idea: Early Labs.
Early Labs is a crowd-ideating site where idea people can pick the idea they want to work on and receive equity in the company when their idea / product is accepted. How it works is that dreamers submit dreams of what they want solved, Early Labs curates those dreams and only presents the best dreams to ideaters, who then work on turning those dreams into ideas. Dreamers get 5% equity in an accepted dream and ideaters get equity depending on the piece of the dream they idea.
Early Labs then submits the idea to Late Labs and hopes for the best.
GOAT post.
double
melvvvar: i have an idea: a
You have to play the game to find out why you're playing the game.
monyet: freeloader: Taking
Going Concern: melvvvar: i
That's awesome! As everyone
Great post, Eddie. Many
burrman: Great post, Eddie.
fuquamarine: I was looking
To those who wonder why would
Pretty intersting site - I
I'd sign up to that. $$
finance is the science of goal architecture.