Loomio
Thu 17 Jan 2019 5:21AM

Equity & ownership share decisions

P pospi Public Seen by 149

Container thread to come to agreement on whether equity should be rewarded for particular jobs.

Please link all decisions to the relevant Trello issue card if one is available when posting.

P

Poll Created Tue 22 Jan 2019 8:23AM

Work on community governance processes & equity model should count as equity Closed Tue 29 Jan 2019 8:01AM

Results

Results Option % of points Voters
Agree 33.3% 2 T P
Abstain 33.3% 2 RW DU
Disagree 33.3% 2 DC MK
Block 0.0% 0  
Undecided 0% 2 NH S

6 of 8 people have participated (75%)

MK

Monique Kurdian
Disagree
Tue 22 Jan 2019 11:35AM

It is still my opinion that developing the project governance and equity models would not be taken into consideration during an external valuation by an objective re-financing party. I think this part of the project is probably a labour of love.

DC

Dean Cameron
Disagree
Tue 22 Jan 2019 9:01PM

the shares in LifeBubbles Pty. Ltd. must represent the underlying value of the property and any other salable assets as we have said a valuation procedure will be in place to make this transparent. So the work on governance and ELF social enterprises does not add any value to this so should not be awarded equity shares. I have proposed in my discussion document on this that we have a second class of shares for this which will be awarded for work on the ELF business/s and have included examples

DC

Dean Cameron Tue 22 Jan 2019 9:10PM

we need to go through the existing google token spreadsheet and remove all work that doesn’t qualify for equity such as maintenance and work on the business and website etc and this would go in a separate sheet for a second share class for ELF business O&M. This should be rewarded by some agreed formula from ELF future cashflow. For example ELF will have income from rental including airBNB and leases and possibly workshops and garden and orchard food production enterprises. a certain amount of this class of shares could entitle holders to food credits as well as agreed on cash from airbnb of sculpted home etc or use of sculpted home for themselves or family or rental discounts.

P

pospi Fri 25 Jan 2019 8:51AM

Frankly this line of disagreements makes me feel like we are going around in circles, which maybe could have been avoided if my time hadn't been so taken up by trying to manage everyone and preventing people going rogue that I'd actually had time to work on resolving the conflicting decisions we've previously made in our governance process discussions. Do we want to create our own set of values and internal community logic that differs from the logic of capitalism, the banks and external society? Or do we just want to create a spreadsheet that subdivides a bank valuation by project outputs?

developing the project governance and equity models would not be taken into consideration during an external valuation by an objective re-financing party

Absolutely correct. But completely irrelevant as far as I'm concerned.

the shares in LifeBubbles Pty. Ltd. must represent the underlying value of the property

Disagree completely. Our shares don't need to correlate 1:1 with the dollars the bank thinks the property is worth. It's up to us to value contributions however we want, and split up the property value in the event of a foreclosure in whichever way we please. Besides, hours worked do not correlate with the underlying value of the property and its assets, either. By your logic hours worked on building the downstairs apartment should be worth more than hours worked on building the dam, because that's going to increase the value of the property more.

I agree we need to go through the token spreadsheet and split things up, that much makes sense for a variety of bookkeeping reasons. But from what you're saying above it sounds like you're planning to turn the promise of reward for management work into an "oh, you might get some money some day but there will be zero obligation to actually compensate you". And as the person doing the bulk of the management work, I'm not OK with that being the outcome.

DC

Dean Cameron Mon 28 Jan 2019 9:01PM

Sam this has nothing to do with capitalist logic. The logic was pointed out by Luciano pretty clearly ages ago and it is simple. People have invested money in a property and want the shares in LifeBubbles to represent the asset value so that if in the future want to sell their shares they will get back the money they have invested (unless the property value has gone down in which case everyones shares are worth less and they will not get their original investment back). Now if we decided that we are going to undertake some business work on the property (lets say it was counting the trees on the property so that we always have an accurate tally of the number of trees on the property) and that all work done on the property was equity even if it does not add value to the property. lets say this was such a labour intensive job that we had to issue an additional 10000 hours of equity to get it done. Say the original equity value of the property when we bought it was $100K and the work we have done on the property is worth $500K so there is now $600K of equity shares. In the future someone leaves and we cant keep up our mortgage payments on the property so it has to be sold so that the investors can be paid back the money they put in to purchase it. So the property only fetches 100K on the open market. After the property is sold the original investors get back 16 cents for every dollar they put in. those who didn't get paid for counting the trees are pretty pissed off. Those who did get equity for counting the trees get the lions share of the property sales value but are also pissed off because they thought they were working for $50 per hour or at least that is what they were invoicing the group but in reality they only got a fraction of that. This is no way to run a new economy. Work will be valued according to how much perceived benefit it adds to the community the environment or subsets within those. If we undertake social enterprise activities that others value and pay us for like providing food or accommodation then these activities deserve to be rewarded but not with equity. Like any business effort is rewarded from the cashflow it generates not from the equity it takes to get the business to the point where it can operate. So every business has two valuations. One is the equity = how much the founders put in to get the business to the point where it can operate (equipment property etc) Secondly there is the cash flow valuation. How much value is created by delivering the good or service offered by the business. In ELFs cans this is accommodation services and in the future it could be food, learning experiences, workshops etc. A business or social enterprise can be operated well and generate a lot of cashflow from a given effort or it can be operated badly and not generate enough cashflow to pay wages. Elf is essentially a social enterprise that is using the capital/equity inputs to generate income by renting or leasing the use of the assets. If we do it well there will be enough cashflow to pay those who make it possible to keep renting and leasing assets. If we do it badly the water will run out the roads will turn to mud and the place will not be attractive to renters and we will lose our income streams. It is up to those of us who are working on the business systems and the O&M of ELF to make sure it is profitable. Just like employee owned businesses or co-ops the rewards will depend on the logical application of labour and other resources. Please read the comments in the spreadsheet discussing how rewards for different types of effort should work. It makes no sense to keep trying to get equity for work that adds no value to the assets of ELF.

P

pospi Tue 29 Jan 2019 2:25AM

No, I still disagree and you still aren't getting my point.

People have invested money in a property and want the shares in LifeBubbles to represent the asset value

I would push back on this. Have people invested in just a property, or have they invested in a community? Those are different things. My contention is that everything we are doing here, in all the different facets of work we are undertaking, absolutely must succeed in order for ELF to be what (I thought) we wanted it to be. This project will not succeed if we cannot manage ourselves, make decisions and have people "work to own" just as it will not succeed if we cannot build dwellings, improve gardens and improve the capital value of the property. You can't just draw an arbitrary line somewhere and say that our success depends on one category of work and not another. All these things are necessary to build ELF, and those who invest time in them should be entitled to the same promises and security for the work they do.

You're creating a situation where we value money more than other types of energy put into the property and that goes against the entire concept communicated to me as to what we intend to do here.

If we decided that [...] all work done on the property was equity even if it does not add value to the property

Counting trees is a poor example. I am not advocating that all the work we do counts as equity. I am arguing that all the work we do which adds value to ELF should count as equity. You want to restrict that to 'adds value to the property' and I am saying that the property is not the full picture. If it was we might as well stop doing all the governance work, go our separate ways, have workaways come in to build stuff, run this as a dictatorship and get regular renters in to fill the dwellings we build.

And besides, aren't all shareholders supposed to be involved in every decision as to what constitutes equity?

But let's not have that reality make this a problem we push further afield. The framing for those who buy in is very important, and my belief is that they need to understand that they are buying in to a community, not just a property. If they don't understand that, if they're not behind the vision and all they care about is capital returns, then they should be investing elsewhere.

Those who did get equity for counting the trees get the lions share of the property sales value but are also pissed off because they thought they were working for $50 per hour or at least that is what they were invoicing the group but in reality they only got a fraction of that

That is also a reality for any investor who fronts capital so I don't see how it is relevant. If external society comes in and values what we've done differently then we just have to suck it up and divide the value they have imposed upon us based on the (clear) agreements we have internally about what is valuable. No, it's not an ideal way to run a new economy but until the rest of the world catches up with new ways of seeing value then we always run the risk that the old economy intrudes and subverts what we're doing. That's just the reality of being at the forefront of this movement.

One is the equity = how much the founders put in to get the business to the point where it can operate (equipment property etc)

How are "equipment property etc" the only things needed to "get the business to the point where it can operate"? If you have those things but do not have processes about how to work together then you do not have a business.

Secondly there is the cash flow valuation

In an ideal world, the capital valuation + the cashflow valuation would be equal to the combined equity of all members. It may indeed be close, but it won't align. It won't align because (I thought) our goal is to supercede the limited understanding of value which society has now. The bank does not care about permaculture, or low-energy materials, or a resilient smoothly-running community. They have no model nor capacity to understand that sort of value but I do. And if everything myself and others across the world are working on comes to fruition, one day the banks may understand and recognise this value too. That's what is so important about what we are attempting here and why the ELF case-study matters in the grand scheme of things.

If we do it well there will be enough cashflow to pay those who make it possible to keep renting and leasing assets

I see this as more to do with the issue of maintenance work vs ELF improvement work. I'm not suggesting that the time/energy cost of running ELF be rewarded equity; I think it's very sensible for such effort to be paid via surplus cashflow. As an example, in the larger houses at Damanhur they pay particular people to cook every night.

This also speaks to a related but separate issue which I'm trying to get to the bottom of by disambiguating the mortgage situation. IMO we should all be earning equity for work undertaken that improves ELF and have the opportunity to sell that equity back to the community for money if we need to, in the same way that you are currently doing.

It makes no sense to keep trying to get equity for work that adds no value to the assets of ELF.

Again with the focus on assets! I think it makes every bit of sense for members to earn equity for work that adds value to ELF.

P

pospi Wed 30 Jan 2019 7:11AM

I let this go yesterday, but suppressing the resentment is only going to make it grow so I think it is worth airing here. I noted @moniquekurdian's comments in the meeting last week that she feels people are "quibbling over equity", and I see that same resentment reflected in @deancameron's use of the phrase "trying to get equity" yesterday. If this is your interpretation of my motivations and actions here, then frankly- fuck you. Especially after you all praised me for my idealism and that I am not motivated by money. If you understand that about me then you should be able to see the discrepancy in those lines of thinking.

I am engaging with this because I am trying to remove all the ambiguities from our model and design something that makes sense. I am a software engineer and this is what I am trained to do. The rest of you do not have that skill in any way that I have seen evidence of, and the mess of conflicting governance decisions and rescinded conclusions I must one day resolve is a clear indication of that.

Anyway, I don't want to go on about it and I don't need any response or apology- I'm just setting the record straight and checking this perspective before it festers any more. If you feel a need to respond I ask that you do so as a reply to this post so that all the discontent is dealt with in one place and does not pollute the rest of this thread. Again- I understand that issues of finance and money can be triggering for people and this is a very difficult topic to discuss. No hard feelings <3

Copypasta from some journalling I did today:

It feels to me as though we're going backwards, and where previously we discussed things from the perspective of what we deem valuable outwards, now every conversation starts with the facts of what the external world deems valuable and works its way inwards because, I'm told, "things just have to work that way". The problem is, I don't understand that world and the others don't understand the new world, so it feels as though we cross-talk a lot. And I still say, "fuck that shit". We are sovereign and should not be beholden to the shitty realities of capitalism. But I also tire of the argument and maybe I'll just give up. Perhaps it's all too new and people simply aren't ready to see the world that way yet. It doesn't mean we can't still do innovative things when it comes to value. Things are imperfect. I need to learn to pick my battles.

With that in mind, I'm wondering if we should rewind right back to basics and try to lay a foundation for what we intend to discuss, because at the moment it seems that even that is unclear.

RW

Rodney Whitman Wed 30 Jan 2019 12:32PM

When dropping the F bomb it is hard to get the people we are directing our thoughts to , to reply with an open mind. Do we want to resolve understanding or fight?

P

pospi Fri 1 Feb 2019 12:07AM

Of course we want to resolve it, and I take your point. Re-reading now, this one was a bit much and didn't come out quite as I had intended it to.

My challenge to you all here is to think back and remember why we all got into this thing in the first place. Try imagining your own reasons first, then go around the group mentally, one by one, and have a think about what that person is doing here. Don't talk to anyone about it- the exercise is just for you.

I'm upset about this because I can feel the way group sentiment is sliding with money being tight at the moment. I can feel us all energetically 'clenching' and falling into scarcity mindsets, and worry creeping in at the edges, and all of us freaking out a little bit and maybe idly wondering what they'll have left afterwards if everything here falls over. It's ok to feel like that. We are all regular people and we have all spent parts of our lives in regular places and it's normal to be scared of all this newness.

But we have to stay focused on why we're all here and what all this is about and remember that each other's intentions are noble and good and that we are all dedicated to building the same vision. We can't lose the trust we've built with each other. I know you don't really think I'm "trying to get equity" and that's why the "fuck you" was supposed to be withheld against the person and brought against the language.

I think it's pretty clear that for most people it takes a long time to get to know others' real motivations and higher purposes. Knowing those drives is fundamentally what builds trust between individuals, so it's really one of the most critical things for creating a tightly-bound collaborative group.

I think some of the discussion stemming from @moniquekurdian's suggested meeting minutes format upgrades also relates to this topic- namely the inclusion of reasoning / strategic alignment indicators in all jobs that we log as a group. Why not a column for the assignee to fill out as well, indicating what excites them or drives them to work on the task?

Being continually reminded of this may have the effect of bringing us joy in addition to accelerating our understanding of each other's purposes and mission alignment.

And maybe that's what we need to regroup on at the moment?

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