> it’s difficult to look at people like Graham — people who aren’t as bright as they think they are
Graham’s (alleged) arrogance about his brightness isn’t really the issue here. Let’s face it, he is bright. That’s not what is causing this boredom/dismay, though.
The issue is that somehow the rest of us became entranced by the “cult of Graham” and his thinking about startups/founders, and collectively we made his way into the way, ostracizing those that lived their life outside the idealized startup paradigm that Graham crafted. Creation of this dismay isn’t on him alone, it’s on all of us.
Sugar Free Dark Almonds from Sees[1] has to be one of my favorite chocolate products of all time. Friends and family always gobble them up at my place so I sometimes buy them as little gifts. I normally abhor anything “sugar free” because substitutes like aspartame taste absolutely disgusting to me, but this uses maltitol, which is a sugar alcohol that achieves a more subtle sweetness with none of the gross fake sugar taste, and since I like my chocolate on the less sweet side, it strikes a perfect balance for me. Maltitol is a mild laxative, but I’m pretty sure you would have to eat multiple boxes to feel anything.
To me, the real issue is that content in apps is temporal with a lack of visit history, unreproducible feeds, and a lack of deep links. This means I often lose my place when a momentary switch to another app causes a refresh on the first app. Even worse, sometimes switches are accidental from a push notification popping right before I click something else at the top of my screen. Websites have this unreproducible feed problem, too, but it generally isn’t as pronounced.
I was in the highschool computer lab, working on a website for the school IT administrator. She wanted me to include a patterned background, blinking marquees, GIFs, the whole nine yards. Another student was working on the project with me, sitting next to me. We were both facing the window, away from the door. The admin left the room. I told my fellow student these choices were extremely tacky, and I questioned the life choices that led her to the point of thinking this looked good.
Turns out she came back into the room and was behind me the whole time. Boy, did I feel like a jerk. I apologized.
This argument falls into the trap of comparing the average home to the stock market. If I was primarily concerned with returns, I would never buy the average home. That would be a home in the middle of nowhere. I would only buy in major metro areas with diverse, heavily entrenched industries and a strong desire among people all over the world to live there (places like NYC). If you look at the numbers in those places, the story is very different. On home value alone, you see appreciation of 8-12% per year on average since 1990 (despite at least three recessions during that time). Covid will impact the desire to live in major metro areas but not enough to seriously impact these returns.
If I wasn't concerned primarily with returns and instead on just saving money over renting, the math is still way better in any of the top metros in the United States so long as you plan to reside there for 5+ years. And if you aren't living in a major metro, you still need to find a place to live, so you might as well make 1% annually on that money as opposed to just giving it away in the form of rent.
In my experience, renting makes sense when you need to pay for flexibility, because you aren't sure if you will stay rooted in one place for 5+ years. Otherwise, buying for many people is a win financially and has been for decades.
Did anyone else read this title as “NYC Pilot (that flies planes) Tries Mental Health Responders in Place of Police” instead of “NYC Tries Mental Health Responders in Place of Police”?
I should clarify that it is certainly doable for widely recognized companies, but it’s very difficult for the majority of startups that no one has heard of even if they have some success. Also, getting on these marketplaces also goes much better with company cooperation and many startups don’t have the time or willingness.
Selling private shares / options on the secondary market is near impossible if the company isn’t on something like SecondMarket. Right of First Refusal, Co-sale Agreements, and the challenges of sharing information with a 3rd party make this difficult. That said, has anyone succeeded and written about their experience?
I agree wholeheartedly. This is important and will provide balance. That said, often people have some sort of passion, their job might be a manifestation of that passion, and they want to connect with peers.
An alternative way of looking at it: whether or not face to face is important for the specifics of the job, it might be important for emotional connection between humans, fulfilling a common human desire to connect with peers and be happy on the job and _outside_ the job. In other words, we might want to be around peers for social (non-job) reasons.
This has been my experience as someone who started a fintech company and has friends in compliance departments at banks. Highly bureaucratic on both the bank and regulator side. Compliance reviews are mostly an expensive song and dance by the banks. People jump from bank to regulator and vice versa all the time so there is rampant cronyism. Combine the cost of this song and dance with the cronyism and it becomes nearly impossible for a startup without a ton of funding.
Unfortunately, getting a no action letter can take years and there is no guarantee you wilk ever get it. So far only one has been issued among probably numerous requests within the last year or two.
100% agree on this assessment and the difficulty of applying securities law. The application of the Howey test is so open for debate that it becomes uncomfortably subjective. See my comment here: https://news.ycombinator.com/item?id=20101984
There is a major issue at stake here that should deeply concern anyone who cares about innovation in the US. I feel that HN is getting too caught up in the "scam" rhetoric and missing the bigger picture.
Whether or not Kin is a scam is an entirely different matter from whether or not Kin is a security. The SEC has jurisdiction over securities, but not over scams generally. There is a substantial debate as to whether or not Kin is a security. At the very least, a decent argument has been made that it is not. Clearly Kik and their lawyers think they can win. Personally, I largely agree with the logic laid out by Kik in their Wells Response to the SEC[1]. HN user elliekelly gave other great examples of of the difficulty in applying securities laws in cases like this[2].
We have to be very careful ceding ground to the SEC on what constitutes a security. This is absolutely worth fighting if you care about innovation in the United States. Many of the donors to Kik's Defend Crypto campaign couldn't care less about Kin. That is not the point. However, they do care immensely about the ramifications this case could have for businesses.
Businesses should be experimenting with new ways to finance companies. Perhaps that is through the sale of tokenized products or virtual currencies. Maybe they will provide great alternatives to venture capital over the long term. The label of "security" is an onerous one that creates massive obstacles to that innovation, especially for small companies. If the SEC succeeds in labeling Kin a security, what could have been the beginning of an innovative step towards new business models for fledgling startups is now forever regulated away into obscurity in the US. Meanwhile, businesses in other countries get to keep experimenting. The lackluster guidance and unpredictable enforcement has already led to companies taking their business elsewhere. It's a shame really.
If there is even a sliver of a doubt as to whether or not Kin constitutes a security, we should not be so quick to cede ground to the SEC. If we let the SEC go unchallenged, they will expand their reach, becoming more entrenched and widening the scope of what constitutes a security. Gaining ground back becomes harder over time, especially if the SEC wins court cases.
If Kin truly is a scam, we have a multitude of ways to prosecute them without involving the notion of securities. If nothing else, we always have regular contract or tort law if there were any contractual misrepresentations or intent to defraud. We don't need the label of "security" or action from the SEC for these kinds of claims, and this approach would be perfectly adequate. There are a number of government agencies that could bring these sorts of cases and fight for the public. Trying to prove it is a security at the same time is simply regulatory overreach.
Bottom line, maybe Kin is a scam (I don't think so), maybe someone should do something about it, but let's be careful about expanding the scope of what constitutes a security. There are plenty of ways to prosecute Kik without ceding that ground.
Side point: if the SEC succeeds in labeling Kin a security this creates all sorts of logical incongruities with past no-action letters or lack of enforcement in other areas. For example, if Kin is a security, why were the San Francisco Giants given a no-action letter for pre-sales of stadium seats "all of which were initially sold to fans prior to the Park’s opening day" which could be resold through "a service that would facilitate the resale of Charter and Club seat licenses"?[3] Sure, the Giants made a buyer represent that they were "not acquiring the [seat] as an investment and has no expectation of profit", but do we really think that stopped people from buying with the intent to profit? ICOs put the same representations in some of their pre-sale agreements, and we all know that did not stop people. What amount of intent to consume vs resale is appropriate? Broadway theater shows do the same sort of pre-sales of seat licenses, and we all know how much people profit from the resale of successful shows. This checks all of the boxes of the Howie Test (paid money, expectation of profit, dependency on managerial efforts). How come the SEC does not bring action there? I don't see fair and even enforcement of the law, which really brings the efficacy of it all into question.
Share grants would be seen as income by the IRS and most states and taxed at their Fair Market Value. Options on the other hand usually qualify as Incentive Stock Options that aren’t taxed at grant time and “when exercised, it isn't necessary to pay ordinary income tax. Instead, the options are taxed at a capital gains rate.” [1]
Options are better up front because there is no outlay for the employee. They are a hassle down the road. However, if you exercise during a liquidation event your tax liability is probably covered.
Stock is a pain upfront unless granted before the first round of funding or any real revenue when the stock value is very little. They are easier down the road, though.
Just my two cents. HackerNews, please correct any errors in logic or how this stuff works.
Correct, the analysis comes with the disclaimer that I am not a lawyer, and it is not legal advice. I am active in the space and have consulted leading lawyers for my own activities, so I come with some knowledge, but obviously this is a quickly evolving space.
For anyone buying tokens and considering SAFT offerings, this is a good read from a securities lawyer, albeit an English one (not US):
In the post, I explore what constitutes a security by examining case law and draw comparisons to other means of raising money for companies that are typically outside the purview of securities (gift cards, Kickstarter). Hopefully this helps provide perspective.
Graham’s (alleged) arrogance about his brightness isn’t really the issue here. Let’s face it, he is bright. That’s not what is causing this boredom/dismay, though.
The issue is that somehow the rest of us became entranced by the “cult of Graham” and his thinking about startups/founders, and collectively we made his way into the way, ostracizing those that lived their life outside the idealized startup paradigm that Graham crafted. Creation of this dismay isn’t on him alone, it’s on all of us.