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Kinda glad to see things head this way. Never really liked ISAs. Thread misses an important separation-of-interests issue — holder of debt should not also be builder-of-future-capital.
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I launched an Income Share Agreement (ISA) company in 2019. Our company survived, but our use of ISAs did not. Overall, I think the ISA experiment has failed and is not the revolution we hoped would transform training and education. Here's what I learned 👇
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They’re not exploitative exactly, but the rhyming with debt bondage/serfdom is more than cosmetic. Precisely because there is a temptation to manage outcomes with a eye on risk of default rather than maximizing individual potential.
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Furterhmore, consumers were consistently confused by ISAs and had a vague sense they were exploitative. I think ISAs are less complicated than debt, but consumers don't have experience with then. Educating the market on a new financial instrument is a big, expensive job.
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Thread says participants behave badly. Of course they do. Moral hazards of free money and hard to collect debt-like obligations. But flip side, if it were the other way around, the creditors would behave badly.
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“I don’t care if you decided you want to make pottery, you’re finishing the JavaScript course and working fro to end jobs until you lay us back. Then make your pots.” Unlikely in modern developed legal labor markets, but plenty of human trafficking works on such principles.
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Interestingly, NFTs might be one way to mitigate the narrowness of “money share.” Issuing effectively an illegible sovereign bond against your own future forces investor to speculate on your potential as you are modeling/discovering it, not as the dollar economy is.
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Also, participants judge educational success in many ways that don't trivially reduce to "make more money". Generally, ISAs narrowly align the organization with this one specific outcome. This new misalignment tends to cause problems for both the participant and the program.
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ISAs actually have the same issue Patreon does, just without the “patronage” positioning, and a more direct opportunity to shape outcomes. Patreon is in the middle of a spectrum with ISAs and NFTs at the extremes.