What if you could connect your wagon to an entrepreneurial star? You know a creative, hardworking person and want to write a check in exchange for what that person produces.
That kind of wagon-hitting opportunity is hard to find today.you can make Income sharing agreement With college students instead of student loans. However, students typically have no track record, conditions are standard, and many students are included in her ISA pool. We are not betting on promising individuals.
Four Russian-born brothers, Daniil, David, Anna and Maria Lieberman, recently started a venture they call. humanism It really allows people to put money in their mouths when they say “I believe in you”. did.I recommend this story About them in The New Yorker, who puts a lot of weight on personal colors.
I interviewed two of the brothers, Daniil and David. I also spoke with a few economists (of course) and another Silicon Valley entrepreneur who had heard of Libermans’ pitch.
I don’t know if the idea of humanism will be accepted, but it is interesting. “Think of buying back 5% of Jeff Bezos or Elon Musk’s future earnings back when they were both puppies. paper About the concept of The Information.
According to a Libermans Company spokesperson, slow venturesA venture capital firm of which Mr. Lessin is a general partner.
The Libermans Company is to hold all projects the family may start by May 2051. Other passive investments such as listed securities that can be held outside the holding company. )
Essentially, the four have created themselves a test case for the Humanism concept. said.
Daniil and David told me the company made $14 million in net profit in its first year. Their main asset so far is Product Science, a company the brothers built to speed up mobile apps.
The Libermans Company has raised two rounds of funding, representing just under 3% of its stake, and the second round of shares gave an implied valuation of $400 million, the brothers said. increase.
One of the reasons people are willing to invest in Libermans is that they already demonstrate an entrepreneurial spirit. They built Kernel AR, an augmented reality startup that they sold to Snapchat owner Snap in 2016. According to his Times article in 2018, at Snap the brothers oversaw an animation studio and worked on 3-D Bitmoji.
Governance is a difficult issue for the Libermans Company. The investor receives a proportional share of the wealth generated by the brothers, but says nothing about how the time and effort will be distributed. Libermans will decide when to pay cash, at which time all investors will receive a pro rata share.
Their concept is far superior to that of entrepreneur Mike Merrill, who in 2008 tried to split himself into 100,000 shares and sell them at $1 per share.hilariously told paper In 2013’s Wired, Merrill gave investors a vote on decisions in his life, including whether to have a vasectomy.
Investors have no say, so there is some risk that Libermans will take the money raised and retire to the beach. The brothers believe they have solved this problem by limiting outside investors’ ownership to a maximum of 10%. Since they retain 90% of him, Libermans almost always injures himself by neglecting his duties.
Daniil and David told me that their humanism concept is a natural fit in Silicon Valley, where it is already customary for angel investors and venture capitalists to choose investments based on their trust in entrepreneurs. . “People, not projects” is a common mantra.
Humanism deals could also be better for entrepreneurs and inventors, they said. Even if most of an entrepreneur’s lifetime projects are blown up, one or her two winners more than make up for it. In contrast, investors demand tougher terms (more shares for a given amount) to invest in a particular start-up. If it’s one of those bombs, they’ll lose their investment.
Lessin, a venture capitalist, cites another advantage. It’s about putting money in the hands of young people who are often rich in ideas but short on cash. “If the young cannot capitalize on their inherent equity value, we will forever be at the mercy of the old,” he wrote in The Information.
Serial entrepreneur Sam Altman told me he’s interested in fundraising innovations that “allocate capital more efficiently to people who might be able to do incredible things.” He added, “I would love to see the experiment run on a larger scale.”
But Altman, the former president of Y Combinator, an innovative organization that funds startups, said he feels more comfortable investing in companies than in people. He hypothesized that entrepreneurs could be given money up front in exchange for the option to invest in companies they might start later.
We also interviewed Daniel Herbst of the University of Arizona and Nathaniel Hendren of Harvard University. paper On human capital financing. They said being able to sell part of a lifetime income stream would be very valuable to someone looking to start an unproven business. However, we focus on those with a proven track record. Such people need less of Liebermann’s system because they can raise money in other ways.
The result is that those who need it most are unqualified and those who are qualified need it less.
reader write
Regarding your Wednesday newsletter on the European energy crisis, why are we still talking about gas and oil storage and stockpiling? Why not talk about healthy transitions? It’s definitely not a war zone, regardless of where the nuclear power plant is located.
connie anderson
Frisco, Colorado.
quote of the day
“The Quakers, more than any major Protestant denomination, fostered what Max Weber called secular asceticism, the idea of living in the world but not out of it. became a felony.”
— David Hackett Fisher, Seeds of Albion: Four British Folkways in America (1989)
Got feedback? Send a note to coy-newsletter@nytimes.com.