Response to Reece Mak’s comment on our Escheatment post

By: Robert Grosshandler | October 5, 2020

Reece took the time to comment a couple of times on our Escheatment post (thanks!). Rather than let it get lost in the comments thread, I’m choosing to highlight it here, because I think the comments and responses are educational for all.

Reece mentions that the shares you earn from shopping (or you might buy on the stock market) are non-voting, preferred shares. Preferred shares are more like debt, but with upside participation. Debt doesn’t have upside participation, and it never gets to vote as a shareholder. Just like Tesla, Facebook, Palantir, Google, and a whole host of other companies (Ford, even), most shareholders in those companies (like in iConsumer) do not have a practical say in the governance of the business.

On the other hand, because they are preferred shares, preferred shareholders get paid out first when/if we start to pay dividends. Before the common shareholder (me). That’s the big preference.

A problem with this governance model is that it tends to make people less likely to voice their opinions. I want those opinions, even when they think I’m wrong, thus this blog. It helps me and the rest of our team make better choices. (Sometimes I question this choice: I’ve got thick skin, but I still don’t like being told I’m wrong or that my baby is ugly. Sigh – I still think it’s the right way to do this.)

Governance when you expect to have a million shareholders is a big deal. It’s cumbersome, and prohibitively expensive for a small company. I couldn’t imagine trying to accomodate a shareholders meeting with 1,000,000 potential attendees, even virtually. I fully expect that at some point in the future our governance structure will change, whether to accommodate an uplisting to an exchange, or the requirements of a large investor.

Reece mentions that other apps have better user policies. We love to learn from competitors. I hope Reece takes the time to tell us which competitive apps have policies that address giving users a stake in the financial future of a startup company when you earn those shares by being a customer. Or another rewards and loyalty company where management shares their financial progress publicly. When we started out all we could point to were the times companies didn’t include their customers as shareholders (think Oculus’ crowdfunding, then selling to Google for oodles of money, none of which went to the early adopters who made Oculus possible by buying their VR stuff).

Sharing this journey is at least half the value of iConsumer. Thanks to everybody for making the journey exciting.

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