Official News page 4

THE PHILOSOPHY OF BUSINESSES

by Hazed

While we're in a philosophical mood, it's worth explaining just why Alan has spent all this time working on the code for businesses, which replaces code that already existed. What was the point of this massive and complicated rewrite - why didn't he just leave companies to run as they were?

The problem with the old model for companies was that it was unbalanced. In the struggle between the CEOs who own the companies and the Financiers who invest in them, the power tilted too far towards the Fins. Their ability to buy up shares in companies without the owners having any say in them may have mirrored how public companies work in real life, but it caused endless unhappiness in Fed DataSpace.

The change introduces a new kind of company - a private business - in which the control is back with the boss, She can decide who to sell shares to, so it's no longer possible for a Fin - or a family of alt Fins - to grab control.

The real-life model used for business is hi-tech start-ups. The founders of such organizations do not have the capital to build a viable business, so they actively go out and seek seed capital from venture capitalists. On the other side, the VCs cannot just invest in any start-up they choose, they have to persuade the founders to allow them to take a stake.

Another way in which non-publicly quoted companies differ is that they don't pay out dividends. The shareholders make their money from the capital appreciation of the shares when the business finally makes a public offering. In addition, the accounts of a private business are not available to everyone to examine. Instead, those interested in investing have to talk to the owner and look at information he/she/it provides - perhaps in the form of a spreadsheet.

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