Giving capital to promising people “too early” in their career is a great idea with much further to go, and the power law provides an interesting way to finance it.
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Isn’t this basically an ISA?
No. ISAs (a) only apply to individuals and (b) can, and should, be capped.
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I guess I was interpreting “right to invest in next startup” as potentially “right to take some of the proceeds (Z%) from equity or received in the next X years,” which isn’t what Sam said but would achieve desired alignment. Why ISAs should be capped? Taxes aren’t
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Miles I'm with you. It could be an ISA with a pro rata, applied only to technology started within 2 years of said funding. After the 2 year cliff, you lose the right.
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I think this is an interesting distinction perhaps worth further probing. The whole VC model works precisely because the upside is not capped, and that has led to an increased level of risk tolerance benefitting the entire ecosystem.
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If you brought the funding model down to individuals, what would be the precise reasons why the same logic as VC model shouldn't apply? Could the absence of upside cap lead to increased access to productive capital to more individuals and ultimately a better outcome overall?
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