Paying freelancers in equity and dividends
sahillavingia.com
Paying freelancers in equity and dividends
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Re: Paying freelancers in equity and dividends
#2I invested $1,000 in Gumroad back when they did the public fundraise, and I got back ~$70 so far. At this rate it'll take multiple years to break even, much less earn a multiplier. But oh well, I liked the Gumroad team so I wasn't looking for much of a profit anyway.
Related, I thought it was hilarious how so many creators on Twitter publicly stated they were leaving Gumroad when the 10% fee change was enacted, only to have the fee actually be a success. It's Netflix all over again, it just goes to show how the internet and the people on it create a vast but very vocal minority of opinions that are not worth listening to in the real world. Anyone worth listening to is not shitposting on Twitter and other social media.
Re: Paying freelancers in equity and dividends
#3I love seeing into Gumroad so much. Very curious if it's worth 100 M at the moment based on dividends
In 2023: 20.7 M Revenue - 8.9 M net income - 5.34 M dividend
With no net income growth would take about 19 years for the dividends to pay out your original investment
Will be interesting to see the 2024 numbers.
Re: Paying freelancers in equity and dividends
#4I wish you addressed your original hypothesis with concrete examples (is this fair, does being early matter, is it clear)
Eg, you gave equity to early contributors, how much and what did that translate to? If those same people work as freelance now, are they paid the same relative equity? Same class?
How long would someone allocating to equity need to work before they see the equivalent in dividends? Calculator seems like 25 years. Or working as more or less full time for 12 years with a 50% split.
For me by the end I was left with more questions than answers, so I side with mom, but I like the general idea of https://flexile.com/
Re: Paying freelancers in equity and dividends
#5I think Flexile is a great concept, and there's tremendous value in simplifying things like equity & dividends. I'd like to see dividends become the norm for other companies!
Re: Paying freelancers in equity and dividends
#6> It wasn’t always this way; from 2015-2019, everyone at Gumroad was paid cash, no equity. No one wanted any.
Gumroad started in 2011 and raised $8 million. The reason "no one wanted" any equity in 2015 was because they laid most employees off, replaced them with contractors, and the investors wrote their equity down to $1 as a gift to the founder. The founder got to keep the IP, ditch the founding employees, and continue running the company.
The founder wrote a couple articles about the experience:
https://www.businessinsider.com/startup-failure-gumroad-why-...
https://sahillavingia.com/reflecting
What's not pictured in these articles is the employee perspective. The founder got to keep his company, got the company's IP handed to him, and I don't know what became of the employees' equity. Probably nothing, given that the company had to be written down to nearly $0 for this transfer.
I remember reading a very angry Twitter rant from an ex employee who was burned. I wish I could find it now, but that was nearly a decade ago. It was one of my cautionary tales about taking equity in startups at the time. It hadn't ever crossed my mind that someone could take VC money, pay employees (partially with equity) to build a company, then everyone gets laid off, equity declared worthless, but the founder gets to continue operating the company at a profit.
It's also interesting to note that the Tweets embedded in both of those articles above come from Austen Allred, the now-infamous founder of Lambda School. Lambda School was rebranded to BloomTech after their first wave of scandals, which was rebranded again to Bloom Institute of Technology after their recent scandal (which resulted in Austen being banned from all student-lending related activities for 10 years). The two of them are prolific social media users and have an incredible ability to rewrite their own stories through sheer volume of social media postings and articles.
Re: Paying freelancers in equity and dividends
#7I wish you addressed your original hypothesis with concrete examples (is this fair, does being early matter, is it clear) Eg, you gave equity to early contributors, how much and what did that translate to? If those same people work as freelance now, are they paid the same relative equity? Same class? How long would someone allocating to equity need to work before they see the equivalent in dividends? Calculator seems…
why would this platform need to have the answers to those questions? i would guess that all of those questions should be left up to each individual company. that is something to be figured out by the company, not the platform. it seems like flexile is simply a platform for facilitating those types of labor agreements. i doubt they want to be opinionated about all of that, and i think they shouldn't be. the platform is a system to make those deals easier, regardless of how the equity is structured etc.
at least, this is my hope as a broke ass peasant who invested in gumroad's "funding" offering, and also as somebody who sees this tool as a simple way to facilitate alternative labor relationships.
Re: Paying freelancers in equity and dividends
#8I invested $1,000 in Gumroad back when they did the public fundraise, and I got back ~$70 so far. At this rate it'll take multiple years to break even, much less earn a multiplier. But oh well, I liked the Gumroad team so I wasn't looking for much of a profit anyway. Related, I thought it was hilarious how so many creators on Twitter publicly stated they were leaving Gumroad when the 10% fee change was enacted, only…
> it just goes to show how the internet and the people on it create a vast but very vocal minority of opinions that are not worth listening to in the real world
I saw this criticism of Twitter, way before Musk bought it, possibly even before Trump became president. This [0] story from 2018 was about journalists paying too much attention
It does feel like Twitter and Facebook are shadows of their former selves though - partly because on the rare days I go to facebook, it rarely has anything on from humans, partly because it's not covered in news that "Blah Blah said Blah on Platform". That's a good thing.
I'm uncertain what drives Meta's continual growth
[0] https://www.cjr.org/the_media_today/journalists-on-twitter-s...
Re: Paying freelancers in equity and dividends
#9I invested $1,000 in Gumroad back when they did the public fundraise, and I got back ~$70 so far. At this rate it'll take multiple years to break even, much less earn a multiplier. But oh well, I liked the Gumroad team so I wasn't looking for much of a profit anyway. Related, I thought it was hilarious how so many creators on Twitter publicly stated they were leaving Gumroad when the 10% fee change was enacted, only…
Sorry, but to confirm, they charge a 10% flat fee and that's it? That's insanely good compared to every other platform I've seen for any type of commerce. Sure, Amazon, Apple, and the like also help offer exposure and some other services, but 10% flat seems completely worth it until you hit a critical mass where it makes sense to handle things yourself. I imagine that number is very high though.
Re: Paying freelancers in equity and dividends
#10> Today, Gumroad pays hourly freelancers around the world $125-$200/hr.
Compliance with local laws is VERY difficult. I would not take this equity even for free. It triggers all sort of accounting laws, exceptions and so on. How should I estimate the price on my tax returns? What if I am on some sort of sanction list?
Cash is the king when it comes to freelancers.