Mark Cuban – owner of Dallas Mavericks – put an interesting perspective on the AIG bonus situation using an analogy to a free agent athelete. Did I say he owns the Dallas Mavericks?
Hint – to keep good employees, financial firms will have to offer not bonuses but options. IF they do well in a few years they will get filthy rich and it will look like they did it off taxpayers money. How will that play in the press?
Seth Godin writes about how company founders can split equity.
Key point: Don’t give out all the common stock. If you and I split a company 50/50 we each own half. If we you get 5% and I get 5% for all practical purposes we still each own half. But we have a lot more latitude about how things work in the future. Seth doesn’t say this, but as an angel investor I know, founders often have no idea of the most useful place of common stock in the pecking order of a growing company.