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How should we pay ourselves?
2 days ago
furion69 in startups
Here is a hypothetical scenario:
We are a blockchain startup that just raised 10 million dollars in a crowdsale.
How should we manage our runway?
More specifically, how do we pay ourselves?
Before I go any further, I should say that I have absolutely no idea what I'm talking about. I have been a solopreneur for majority of my productive life, and have limited experience with team work, and absolutely no experience in running companies. Perhaps my fresh, and rather naive view can be useful to re-think the 'standard' way of doing things. Feedback on these ideas is very welcome.
$5,000 a month for everyone
I think everyone should be paid the base salary of $5,000 in notional value. The actual means of payment may vary (Bitcoin, ETH, Fiat, etc), but its underlying value should be calculated and capped to the maximum with each payment.
Why $5,000?
This salary is high enough for comfortable living in most places around the world, but low enough to repel people whom are only interested in the size of the salary, and not the project itself.
Why Everyone?
Yes, everyone should be paid the same. The CEO as well as the junior developer we just hired. By paying everyone the same, we decouple the subjective value of each team member and behind the back politicking (playing favorites, asking for raises, etc...) from the salary.
Voting based Token Bonus events
Every 4 months, there should be an offsite gathering with goals of reviewing past progress, strategy and team bonding.
During each offsite, a certain, pre-determined quantity of token is to be distributed as a bonus. This token is the native blockchain token of the project that the team is working on.
The bonus is paid in tokens, so that every team member is incentivized to do the best work they can, for the benefit of the project, which benefits the team and individuals alike (virtuous cycle).
Voting based distribution
Every member gets an equal portion of voting shares. Every member can use their shares in arbitrary amounts to vote on other people in the organization. Typically, people will use their shares on people they work most closely with, in a subjective manner.
This system is imperfect, in a sense that it does not distinguish types of value from individual perspective - for example, someone might put more weight on how nice someone is to work with, over what they brought to the table in terms of innovation and code.
In the bigger picture view however, a consensus forms - based on combined opinions and views of the world from all individuals.
The premise is that this system could be more efficient and fair over an arbitrary, and often skewed bonuses tallied by people on the 'top'.
As a side note, the voting should be done with perfect information (who voted, how much, and for whom - should be available in real-time), and everyone can change their votes until the deadline. Participation should be voluntary.
Also, a weird anomaly in individual vote sums, particularly in regards to people in executive positions should trigger a performance review.
Fire fast, and pay well to leave
It is possible to hire talented, good people who just aren't a fit. We should be very vigilant in weeding out people with negative long term impact on team morale and culture.
New hires should be on a two month probation period, and should be excluded from participation in the first token bonus event.
On Firing
Fire fast, and pay people fairly when they leave. Its not their fault that it just didn't work out - remember both parties had limited information at the time of a hire.
Edit: As you may have noticed, there is no mention of founder shares or vesting. That's because there are none. Founders should not be entitled to a stake just because they started something - they should earn their place trough contributions and leadership.
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