It seems odd to me that employee ownership is not more commonplace in the global tech world. Especially for companies that serve a small niche with a useful product that won't necessarily scale massively, why try and chase VC funding instead?<p>Particularly for techies outside the major global funding hubs, employee ownership seems to be a model much more aligned with building a sustainable business with the potential for greater employee satisfaction and a healthier culture.
> Especially for companies that serve a small niche with a useful product that won't necessarily scale massively, why try and chase VC funding instead?<p>Those aren't the only two options, though. None of the companies that I've started have been employee-owned, but equally, none have taken any VC money either.<p>> employee ownership seems to be a model much more aligned<p>It certainly is, but it's also not the only possible model to get those benefits.<p>My companies have not been employee-owned because setting that up is itself expensive and time-consuming. It's something I'd consider once the business is mature, but while it's ramping up, my hands and funds are tied up with more urgent things.
The cash to pay workers and rent must come from somewhere. Either an investor cash infusion (VC) or some exotic shell dance of market survival until everyone gets reliably paid.<p>Consider it is the art of keeping money flowing that allows companies to survive. While employees owning stock is in no way rare, employees managing cash reserves (especially in the first three year viability phase) is a different matter.<p>Someone else owning the company you're paid to work for is the convenience tax for keeping business alive.<p>Try doing anything with anyone involving money and responsibilities and you will throw your rosey glasses away and get back to making your own value even if commoditized by another!
Because very few developers want to take actual personal risk beyond letting some portion of their compensation ride in the form of lottery ticket like stock options. Most would rather earn enough to support themselves comfortably from their base salary. So much so that you have a very real risk of adverse selection if you try to find developers who are willing to take those kind of risks.
One reason I can think of is the amount of capital required. So basically when Microsoft or Apple started out, you didn't need a lot of capital to build a minimum viable product. There were not many tech products.<p>Nowadays, it's it's obviously different. To come up with something innovative, you need to develop something for a longer time so that it's better than everything that's already out there.