Yes because he’s throwing the baby out with the bath water, being completely myopic about the value add to society and what it takes to make America competitive.
Of course he’ll be dead before the real multi-generational consequences take effect.
I don't know how this works, but my question is, on a funding round, couldn't the C suite just allocate themselves additional equity in proportion so that their total value remains the same?
They could, but the shares represent value - and that money needs to come from somewhere. Simple, but extreme example: A company is valued at 10 million gobbledoks, and the C-Suite holds 10%, representing 1 Million valuation. Now the company takes 10 Million gobbledoks Investment that end up in cash on the companies bank account. This raises the the valuation to 20 Million.
Under simple dilution rules, the Investor takes 50%, and the existing shareholders are diluted to 50% of their stake - the C-Suite owns 5% of 2 Million, 10 million as before.
If the C-Suite demands that their equity proportion remains at 1%, they’d suddenly own a stake representing 2 million valuation. That difference needs to come from somewhere.
There is actually a sense to the dilution. If I have something I think is worth $10m, and I'm asking someone else to give me another $10m, doesn't it make sense for that person to own 50% of the company? Why would any investor give you $10m wile receiving no ownership of the company? How are you going to give these newer investors ownership, if you don't reduce the ownership of everyone else?
The claim in the tweet was that they got 1% of the value of the diluted shares: e.g., on paper they should own 1% of $100m, but somehow they only got $10k out of it. There does seem to be a culture of this going around now -- the VC version of "Hollywood accounting". In a lot of situations it doesn't make much sense to me -- is it really worth poisoning the well of startup talent for the VCs to get $95m instead of $85m?
> If the value of a company is $10m and the company asks an investor to give $10m in exchange for equity, the investor should own 100%.
That's not investing, that's buying. Buying means the buyer gives $10m to the previous owners, at which point as you say, the previous owner owns 0% and the new owner owns 100%. But the company is in the same position as it was before -- the same amount of cash on hand as it did before.
For investing, you're putting cash into the company's account, which raises the total value of the company.
Value of the company before investment: intangibles + pre-investment cash - debt = $10m
Suppose I own 10% pre-investment; 10% of $10m is $1m of estimated value.
Value of company after the investment: intangibles + pre-investment cash - debt + $10m == $20m
Now I own 5% of $20m, which is still $1m of estimated value. The investor owns 50% of $20m, which is still $10m of estimated value.
In practice of course, there are different classes of shares which end up being paid out differently.
Legally speaking, it’s probably possible. Practically speaking it almost certainly a guarantee that the company will never see outside investment. On every round someone would need to pony up the cash to fill that employees stock. Anti-dilution clauses exist, but they never work like that.
Such a privilege is also likely to be almost worthless - if the company succeeds and the round makes it worth more, you’ll win even with dilution. If the company doesn’t, then other clauses such as liquidation preferences will make your stock worthless, regardless of how much you own.
The difference is that if the company succeeds, an employee afforded this provision is guaranteed to make $X.
Without this provision, it's possible in many ways for the employee to be left with far less than $X, even if the company succeeds. In some ways <<<<<<$X.
I believe OP is lamenting the fact that we still need to have the "EV/hybrids's are better the ICE vehicles" discussion in 2025. That there's a segment of the population that needs a mountain of such overwhelming evidence to be convinced of the value.
And those people who would lose money are the EV manufacturers. AFAIK in the US EV manufacturers are barely making money even with gov’t subsidies (baring Tesla). They can’t charge what would be necessary without subsidies because most people simply wouldn’t want or couldn’t afford such a product at that price point.
I've been looking for a place to talk about this. Seemingly through a potent combination of government subsidies, willingness to embrace the technology, and general STEM competence, China has exploded with quality EV manufacturers. The ICE manufacturers are doomed regardless of what type of car they try to sell.
It makes me wonder about this from a policy perspective. China, more than any other country, has the power to dump products at a net loss to the country for the sake of a long term victory. That's tough to combat.
I think this view is very myopic and needlessly ubiquitous.
I do agree that worse but cheap will be used a lot right now. But we also have it already with outsourcing, and not everything is outsourced.
Signaling theory provides a useful perspective here. If everyone has access to the same tools for thought, then everyone can arrive at the same output independent (mostly) of skill. That means the value of any one computer generated output will crash towards an average minimum. Society will notice and reward the output that is substantially better and different, because it shows that someone has something far better than the rest of access to or are capable of doing. This is even more heightened when the markets are flooded with AI slop. It’ll become obvious and distasteful.
Those with skills and ability to differentiate will continue their existing ascent.
That’s just the excuse for a certain segment of the fundamentalists. Trump doesn’t give a shit about Israel. It’s about attacking all institutions that aren’t aligned with him.
You think if Harvard went “America first,” he’d be trying to shut them down?
So we want to shoot ourselves in the knees, for fun? It's clearly about Israel, otherwise we wouldn't be giving a country billions that we can't trust with our military secrets (because they sell them to our adversaries), that has a track record of killing American citizens and never prosecuting anyone responsible, and who constantly defies us despite relying on us to even exist
Multiple things can be true at the same time. US military / political support for Israel is multifaceted. But I’d argue trumps use of Israel as a reason to punish academia or withdraw from unesco is not.
That’s most obviously not true but whatever. Not even sure why you’re hating on Israel when the point at hand is it’s just one of many rhetorical tools that this admin uses disingenuously.
As a Jewish American my experience has lately been that about 25% of the Jews in my circle have always been Republicans and are all-in on this administration, believing that Jewish people and the State of Israel have no better friend than Donald Trump, and that all previous (Democratic) administrations have been anti-Israel. The other 75% are moderate Democrats who roll their eyes at the idea that Trump, his admin, or the vast majority of his voters care one iota about Jews or Israel, that they've found a convenient pretext for clamping down on private institutions and free speech, and see only minor differences in their actual foreign policy vis-a-vis the Middle East and Israel.
I consider myself a moderate's moderate and I do see where everyone's coming from, but if you held a gun to my head I'd probably agree with you: it's not actually about Israel.
Software engineer salaries in the US are significantly higher than electrical and computer engineering salaries and have been for a whole. Most of the bright and ambitious EE and CE people went to faang companies in 2010s and probably earlier too.
A big reason why TSMC is competitive on the global market is precisely that their wages are low.. Granted, they don't have a finance industry or big tech to draw away talent.
I had a great job in R&D at Intel, in a department full of PhDs, in the 2010s, then jumped to another semi company from 2015-20.
Just before the pandemic in 2020, I got a job at AWS as a software engineer. It wasn't the only reason, but it was clear that I could make a lot more money in software.
I quickly became disillusioned with almost everything about how large software companies work, and now back working as a data scientist for an advanced manufacturing company 5 years later.
I won’t get into h1b which gets plenty of air time, but this is the first time I’ve ever heard anyone wanting to eliminate OPT. This is beyond idiotic. Foreigners come and get educated in the US; if we didn’t have OPT they’d have to go back to their home country and contribute there. Instead with OPT we give them a chance to integrate into American companies, making the US more competitive as a whole. This is a massive strategic advantage. Places like MIT/CalTech/CMU are heavily made up of foreigners. We need the best and brightest minds from the world; only pulling from 350M vs 8B is a giant mistake.
One of the big advantages US has is that it's on the receiving end of brain drain. A lot of the best talent worldwide wants to go to US, learn in the US and work in the US.
The STEM OPT _extension_ is an additional year on top of the one year that all graduates get. I believe the article is arguing for getting rid of that extension, not all OPT.
More like they come to America because there aren't enough opportunities or good enough facilities back at home, get years of experience and knowledge, then go back home and start a billion dollar business that starts competing with said American companies they were just working for.
Of course he’ll be dead before the real multi-generational consequences take effect.