The obvious solution (which I'd recommend) is that the cut should go to the funded company, not the founders. The majority of the cut would still go to the founders, since they own a majority of the stock. But this gets everyone (founders, employees, investors) on the same page.
Overall, this is a great idea. The point of a value added investor is to increase the likelihood of positive outcomes. This is a great way to do that.
I don't know. If they give a founder a sliver of a point in the fund, that's motivating. If they give it to the company, then the employees are getting... what? 0.1% to 2% of a tiny sliver of the fund? The more you spread this around the less motivating it is... Might be a nice benefit, but their goal is to change behavior (motivate potential founders to be interested in their fund and motivate portfolio founders to help each other).
The other problem is that it's founders who invest time to support portfolio companies, not shareholders/employees of the company, so the incentive seems appropriate and aligned IMHO. I can personally speak to the fact that the best support, in my experience, seems to come from founders currently operating their own company, currently in the trenches, and they usually have the least time to offer.
Comments
The obvious solution (which I'd recommend) is that the cut should go to the funded company, not the founders. The majority of the cut would still go to the founders, since they own a majority of the stock. But this gets everyone (founders, employees, investors) on the same page.
Overall, this is a great idea. The point of a value added investor is to increase the likelihood of positive outcomes. This is a great way to do that.
I don't know. If they give a founder a sliver of a point in the fund, that's motivating. If they give it to the company, then the employees are getting... what? 0.1% to 2% of a tiny sliver of the fund? The more you spread this around the less motivating it is... Might be a nice benefit, but their goal is to change behavior (motivate potential founders to be interested in their fund and motivate portfolio founders to help each other).
The other problem is that it's founders who invest time to support portfolio companies, not shareholders/employees of the company, so the incentive seems appropriate and aligned IMHO. I can personally speak to the fact that the best support, in my experience, seems to come from founders currently operating their own company, currently in the trenches, and they usually have the least time to offer.