Equity Transcript: Silicon Valley Founding Fetish Infantizes …

Equity Transcript: Silicon Valley Founding Fetish Infantizes …

Welcome back to this Transcribed edition of Equity of the Week.

This was a great week of news that the Equity duo had to cover. Kate was at the Code Conference, Fortnite maker, Epic Games bought Houseparty, and a bit more about the Bird-Scoot deal.

Then there was talk of CrowdStrike’s IPO, which led to a heated discussion about dual-class stocks.

Alex Wilhelm: I think it’s honest. I think giving the public one vote per share, and giving you 10 for you to retain more than 50% of the vote is a blow. I think it’s ridiculous. Just fly under your own flag. If you don’t want to share any controls, then don’t. If you want to have a company with a functional government, that adheres to the historical norms of how this works, then have votes. This 10v1 thing is a fracking sham, because I can’t swear on this show, so you can fill it out yourself. If you want to see a historical example of a company that didn’t have this setup, it was Amazon, which historically thinks much ahead, and has done fantastically well. It is a public company that grows from, I believe, with revenue of less than nine figures. The idea that you cannot do is garbage. The idea that it always works is wrong. To me, it’s dishonest. If you’re going to sell stocks, go public, and float, share the voting power with your shareholders. Don’t treat them like children, and you like a god. You are not.

Kate Clark: Alex is getting really nervous, but I totally agree with you. Because of that I want …

Wilhelm: I’m not angry, I’m angry.

Clark: That’s why I wanted to talk about it, because I think it’s important. I think what you just said is a perfect summary of why it’s messed up. The only thing that I think will really change this is to see if these dual class stocks, compared to single class stocks, perform differently in the market. From what I know they are not, which means that people don’t care. Or, people don’t know, I don’t know. If a company is not going to lose money doing it… If it is not going to have any consequences, it will not face any negative feedback from shareholders, then of course they will. keep doing it. Like I said, there’s not really much talk.

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