March 8, 2015 Update

The March 8, 2015 update adds two chapters. Chapter ten explores the potential for cooperation–cooperation within a company’s micro-networks of shareholders, employees, customers and suppliers–to provide a tool for competition. Chapter ten explains the Tao of the Fairshare Model. This is my favorite chapter and it will pride grist for thought for anyone with an interest is the defining characteristics of capital structures.

Here’s how chapter ten ends:

 This chapter concludes Section II, which began by examining a range of ideas about two macro-economic concerns that provide context for the Fairshare Model—economic growth and income inequality. It then considered how the ability to cooperate creates might offer diverse ways to address these twin challenges and how Fairshare Model promotes this. This chapter identified two structural elements that determine how a capital structure allocates uncertainty in an equity financing, something that will inform the discussion about economic growth, income inequality and equity crowdfunding. It also presented the most remarkable aspect of the Fairshare Model—it provides venture-stage companies a reason to offer public investors a low valuation. As a consequence, the model enables a well-performing team to create more wealth for themselves than if they use a conventional model and to create competitive advantage when it comes to managing human capital.
The tao of the Fairshare Model is clear—it is to balance the interests of entrepreneurial companies and public investors.
This section has been broad in content and philosophical perspective. Section III returns to narrower micro-economic matters, issues that come into play when venture-stage companies raise venture capital in a public offering—valuation, fraud and failure.