By Karl M. Sjogren *
Send comments to firstname.lastname@example.org
There is a better way to provide venture capital to young companies; better for individual investors, especially unaccredited ones, better for entrepreneurs and better for employees who work at these companies.
The Fairshare Model is designed to grow the economic pie and improve the opportunity for capital gains for individuals who invest in or work for such companies.
So, what's the book about?
A performance-based capital structure for companies that raise venture capital via a public offering.
Interesting! But it sounds complex. How will you get people to read it? You need a hook!
The hook will be the power of an idea. For thinkers, that's enough.
To persuade more people to look at it, I'll encourage them to view capital structures as art and to contemplate how innovation leads to improvements in everyday life. A lot of good things can result from improving the ability of start-ups to raise capital.
I'll also talk about sex and a fairy tale.
Finally, I'll show some pictures to generate interest.
The purpose of this book to launch a conversation about a way to reimagine capitalism at a micro-economic level-the level of an individual company. It does this by providing incentive for companies, particularly venture-stage ones (i.e., start-ups), to adopt a capital structure that provides public investors with a far more attractive investment deal. That structure is the Fairshare Model, which is described in chapter two --jump ahead if you wish.
The core idea is simultaneously radical and ordinary. It is radical because it presents a very different philosophy about how to value companies whose value chiefly comes from its promise of uncertain future performance (i.e., start-ups), and, because it presents a way for Middle Class investors to participate in venture capital investing on terms comparable to what venture capitalists (VCs) get. It is ordinary because it encourages capital markets to work the way most markets work. In most markets, sellers compete to attract buyers by offering a better deal (i.e., lower prices and better terms). I explore why companies who raise venture capital from the public don't this; they don't compete for investors by offering lower prices IPO valuations and better investor protections.
This idea may sound downright crazy to you at the moment. But, by the end of the first section of this book, you'll entertain the notion that one way to reimagine capitalism is with stronger market forces that benefit public investors. That sounds peculiar, doesn't it? "Market forces"usually are associated with adverse developments for average folks. But, when it results in a better product and increased competition for investor capital, it's a good thing. If it can be done in a win-win manner-with benefits for founders, management, other employees and investors-it's a great thing.
I also hope you'll be intrigued enough by the Fairshare Model to tell others about it. Generating interest-"buzz"among hives of people with interest in entrepreneurial companies-is the goal of this book. The second step, the shake-down and de-bugging of the Fairshare Model will happen only if there is a lot of buzz. The combination of the first two steps at will lead companies to try it.
Think of this process like baking…say the sourdough bread the San Francisco Bay area is known for. This book serves as the "starter", the yeast culture that gives the bread its unique flavor and texture. In this analogy, readers like you contribute the other ingredients (flour, water, etc.) that make the dough. When it rises, experts is securities and entrepreneurial matters join in to knead it. Early adopters will try it out. More people will come into the kitchen, contributing ideas on what to make.
I may experience an afterglow once I'm exposed to a new idea. Things may appear in a new light. When I see, hear or read something that relates to the idea, a cascade of new associations is triggered. If I see others making similar connections, I feel as if I'm in a shared wave of consciousness. I get great pleasure when this happens, for I received one of the gifts of being alive and curious.
I presume that you, Dear Reader, feel similarly. So, I hope to engage you with new thinking about capital markets, an interplay between concept and possibility, analysis and imagination. And I hope you'll similarly engage others who will, in turn, do the same.
So, let's have a conversation about how to reimagine capitalism!
I emphasize the importance of valuation for public investors. An article in the Wall Street Journal succinctly states why buy-in valuation deserves to be emphasized. [Bold added for emphasis]
An enormous body of academic research has proved time and again that your long-term investment returns will overwhelmingly depend instead upon just two things: asset allocation-how you spread your money between investments like stocks and bonds-and the value of those investments when you buy them. 
Of course, investors want a low valuation but companies want a high one. However, the Fairshare Model creates an upside for an entrepreneurial team that offers a low valuation in its public offering. That's remarkable in its own right.
It also stakes out distinctive ground among innovative financial models. For example, the so-called "Dutch Auction"model to price a public offering has the effect of increasing an issuer's valuation; thus, it principally benefits the issuer. The Fairshare Model principally benefits public investors, but promises important benefits to a company.
Have you noticed stories that mention valuation? If you're valuation unaware, you can see them, but not really "see"them. Ever puzzled over the numbers? Asked what they mean? Its just one of the topics we'll explore.
There may be times Dear Reader, when points that I make are unclear. It is likely because I haven't explained it well. It may that you have interest in an area that is beyond the scope of this book, which is simply to generate buzz. I offer you two things to deal with moments when you feel disoriented.
The first is encouragement. Stick with me and matters that seem foreign to you will increasingly come into focus. You will acquire a credible view of how capital formation works in a capitalistic economy. I make technical points in simple language. Philosophy, analogy and humor are in my toolbox. Make this journey and you'll have a better understanding of a complex socio-economic process that affects many aspects of life. A credible, coherent point of view about the IPO market for early stage companies, if you don't already have one-a broader perspective if you already have one. You'll gain knowledge and have the satisfaction of being better able to share it with others. If you like ideas, this book will be fun!
The second thing that I offer you is a conceptual compass. Between where we are now, and where I imagine we can be, with respect to how capital formation works, is unexplored terrain. When you wonder where I am headed, where I will turn, how I think a matter should be settled, look to my compass. On it, True North is the interests of public investors who buy stock from a venture-stage company in an IPO.
The interests of entrepreneurs, private investors and investors in the secondary market occupy other points on the compass. They are important, but not as central as those of IPO investors; there is only one True North.
Public IPO investors occupy that position for the Fairshare Model because if they make money, there will be more money for entrepreneurs and their private investors. So, the answer to any question about how to make the Fairshare Model work will likely be found by asking "What is best for the IPO investors?"while giving due consideration to the interests of the other key constituencies.
This is an exercise in balancing and aligning interests-IPO investors hold the fulcrum position.
No company has used the Fairshare Model. It's entirely conceptual. I have no anecdotes about how it has actually worked.
What I can tell you is that about fifteen years ago, I co-founded a company called Fairshare that promoted the concept, and, a way to implement it by showcasing companies that adopted it. We had some success (e.g., a robust educational website, 16,000 op-in members) before we slipped under the waves in 2001; the wake of the dotcom and telecom busts damped interest in the idea.
I touch on my Fairshare adventure in chapter four (Crowdfunding) and more fully in chapter six (Fairshare Model History and Projection). One lesson learned is pertinent here; how to address the Chicken vs. Egg conundrum. Companies will adopt a new capital structure if there is an audience for it. Investors want to see companies using it before they get enthusiastic about it.
The movie "Field of Dreams"has a line to describe to such a challenge, "build it and they will come."  In our case, was the "it"an opportunity to invest in a specific company that used the Fairshare Model? Or, was "it"an audience of investors interested in the Fairshare Model? Which comes first?
For a couple of reasons, we decided that the latter approach, build the audience, was the most practical. The most important one was that the quality of company that we wanted to attract could raise capital in other ways. There would be no reason for them spend the time and money to craft an offering using a novel deal structure unless they could be confident they would raise money with it. Also, garnering support for an idea before it is implemented has an advantage. When a particular implementation represents an idea, attention is directed to the implementation and away from the idea. Even a good company has shortcomings. Having one or more be an emblematic "poster child"for the Fairshare Model risked making that their inevitable shortcomings the focal point, not the Big Idea. This is why politicians prefer to campaign on a Big Idea rather than on a specific proposal (i.e., "I'm for a balanced budget"vs. "I want to cut these programs or raise these taxes").
Some suggested another option, persuade venture capitalists and investment bankers to support the Fairshare Model. Well, that would be greeted with the interest that a high end retailer has for a competing discount store. In fact, when I pitched the Fairshare concept to a prominent San Francisco venture capitalist in late 1998 and his response was "Why would I be interested in THAT ?" 
Much has changed over the past fifteen years, but not that sentiment, I'm sure. However, fast forward a half dozen years or so from now. Once the model's effectiveness is demonstrated, a new breed of VC will consider using it. Perhaps, it will be a way to fund a new round for a portfolio company that is a single or double in baseball-speak, not a triple or home run. Another possibility is that a small venture fund would use a Fairshare Model IPO to bring in public investors who want to co-invest. This would limit the amount of capital the VC needs to raise, allow early customers to have a piece of the action, and provide a liquidity option for the fund's limited partners. There is similar potential for new style of broker-dealer to create a niche market in investment banking using the Fairshare Model. For such things to happen, however, VCs and broker-dealers need to see that there is a market for the model, and, that there is money to be made. This will take time and experience. But it will happen, I'm certain, because of the severe problem that exists when applying a conventional capital structure to a start-up, as described in chapter three. As public investors become more savvy, many will have interest in a better deal.
So, I lead with an idea because it's all I've got. If enough people visualize the egg, intrepid (not-so-chicken) entrepreneurs will give it a go. A community of experts will grow to help other companies figure out how to make the Fairshare Model work for them. Supportive infrastructure will develop. A self-sustaining community of integrated interests will form…organically, if you will.
How many people are needed to give the Fairshare Model the traction that it needs to get the attention of experts? Half of a small fraction of those who supported the Occupy Wall Street protests. There were enough of them to attract world-wide attention to their dissatisfaction with The-Way-Things-Are. It doesn't take many to spark a revolution-the Boston Tea Party wasn't large either.
When protestors demonstrate (it doesn't matter why), they channel Howard Beale, the fictional television anchor in the 1976 movie, Network . One night Beale snaps. He's enraged that his network is abandoning hard news for news that generates high ratings. On a live broadcast, he exhorts his audience to stop being mere observers of the problems that define their existence. In part, he says:
So I want you to get up now. I want all of you to get up out of your chairs. I want you to get up right now and go to the window. Open it, and stick your head out, and yell, 'I'M AS MAD AS HELL, AND I'M NOT GOING TO TAKE THIS ANYMORE!'
I want you to get up right now, sit up, go to your windows, open them and stick your head out and yell - 'I'm as mad as hell and I'm not going to take this anymore!'
Things have got to change. But first, you've gotta get mad! You've got to say, 'I'm as mad as hell, and I'm not going to take this anymore!' 
Beale's speech expresses anger and frustration…negative energy.  It mobilizes, which is why political campaigns favor negative ads. Ironically, though, negative energy is the opposite of what is needed to turn things around. To build something better, one requires positive energy-optimism, creativity and cooperation. I rely on positive energy to solve my chicken and egg puzzle.
How many people might have to invest in companies in order to put the Fairshare Model on the proving grounds? Lots of variables, but it could be less than 10,000. No big deal. In 2014, a guy raised $55,000 from 7,000 people on Kickstarter to make a potato salad. Google it.
Much depends on how the JOBS Act is finally implemented, but it is not hard to see how a handful of promising companies could raise the capital using the Fairshare Model. And, if enough of them have good results, more will come.
This is a book for thinkers. People interested in capital markets or simply interested in reimaging capitalism. With the high demand for his 2014 book, Capital in the 21 stCentury, French economist Thomas Piketty demonstrates that there are many such people. His work focused on the macro-economic drivers of income inequality and it rests on a lot of data and sophisticated analysis. Macro-economics, of course, deals with the broad economy, that of a state, country or the world.
This book as about micro-economics, which deals with the "economy"at the enterprise level. My principal target audience is comprised of average investors, those who may want to invest in the initial public offering of a start-up some point in the future. Some of them see a problem-such companies are routinely overvalued. For them, the Fairshare Model is a solution. There are many investors who are curious about how to value a start-up-they, too, are in my target audience.
My secondary target audience is made up of entrepreneurs who are overlooked by venture capital firms, or, who are willing to consider a public offering as an alternative to a VC round.
There is another audience that is important, but my attention isn't focused on them now. Its angel investors, securities attorneys, accountants, investment bankers, stock exchanges and others involved in the emerging company eco-system. Their buy-in is critical but not in the chicken vs. egg phase.
Broadly, this book will appeal to those who are interested in how to improve capitalism. This includes anyone:
When writing this book, I have imagined different types of readers. For the most part, its been someone who is under 35 years old and curious about business and the economy. That's because it may take a generation or two for the Fairshare Model to become the New Normal.
If you are just moderately or even well-versed in capital formation matters, you'll be intrigued by the Fairshare Model and the challenges it presents to conventional thinking. I embrace your challenges and solicit your help to improve the model.
Ultimately though, my goal is to reach people who know little about this subject. Some will be eager to learn. Others will hesitate because they think capital structures must be boring or that learning about them will require a part of their brain that isn't well-developed. If this is you, Dear Reader, please stick with me.
Having two very different target audiences places me on the horns of a dilemma. Which one determines how I present the case for the Fairshare Model? Those with expertise expect me to get to the point quickly. Those lacking such knowledge need a gentle ramp to merge into the discussion. If I write for one, I risk losing the other. How to engage both is my chief challenge.
An additional challenge comes from technology. Many readers will read this book as an e-book. That format works well for a novel or for a narrative form of non-fiction (e.g., biography, point of view) because it is a linear experience; one reads from beginning to end. However, when the material is a non-narrative form of non-fiction, readers may want to jump around to review what they saw earlier. Here, an e-book may frustrate. A printed book is the superior format someone who is new to capital structures; it is easy to flip through and mark-up pages.
Organizationally, the first section rapidly hits a number of technical, micro-economic points. It's written for those knowledgeable about capital structures and, hopefully, does not overwhelm others. The second section goes into a macro-economic discussion about growth, job creation and income inequality that anyone can follow. Some readers may want to skim the first section, read the second and return to the first. Later sections tackle technical and human behavior matters in a manner that anyone can follow. To aid navigation, the table of contents is detailed and the front of each chapter shows its subtopics.
Stylistically, material is presented in a light manner. I also provoke; inspired by Diogenes, the ancient Greek philosopher, to whom the following is attributed—"Of what use is a philosopher who never offends anybody?"
I serve-up ideas using a literary adaptation of "pointillism", a technique of painting in which dots outline and form an image. Here, ideas serve as dots, and, I share images that I see. You, Dear Reader, will have dots too. As you consider images, ask yourself "What is really going on here?"Then, ask yourself "Is there a better way?"
To simplify ideas, I sometimes use conceptual equations. This was, inspired by Chip Conley's book Emotional Equations . He came to his subject in an effort to analyze emotions he had. A friend had suggested that he find a way to express a feeling as a formula because this would focus his attention on the variables that affect it.
Anxiety = Uncertainty X Powerlessness
This states that anxiety is a multiple of uncertainty and powerlessness. One can reduce anxiety by reducing uncertainty or sense of powerlessness or both.
My favorite equation is one that a caller suggested to Chip when he was interviewed on the KQED Forum radio program. 
Happiness = What is Happening - Expectations
This states that happiness can be increased by improving what is happening, reducing your expectations or both.
Substantively, these equations are insightful. Stylistically, they de-tangle a complex subject. So, occasionally, I express a concept as an equation like this:
Performance = Expectations - What happened
I encourage you to consider capital structures as art, not as an obscure, technical thing that you need special expertise to consider.
I love art. I have an affinity for some forms. For instance, I particularly love sculpture, especially if it portrays realism or ideas. When inspired to do so, my father made such works, so I appreciate the skill, sensitivity and imagination that it requires. I appreciate paintings too. When I look at a piece in a museum, I step back. I shift my position. I get in close to sense technique, sometimes inches away, which surely strikes some who are around me as peculiar. I also read the placard to learn about the artist's time, place and life.
As a result, my accumulated sense of art, of history, and of human nature and experience itself is richer than if I experience pieces as mere objects. On occasion, this perspective gives me insight into matters that are wholly unrelated to art. That's because a broad base of reference points-dots, if you will-enables me to draw richer connections.
Here's an image that I want you to contemplate.
Note that this simple question suggests others such as, "What is the value of the company?"and "How might it be measured"?
Answer these questions and others emerge. Like "How likely is it that the answer is wrong?"And, if the odds of that are high, doesn't that cast the first two questions in a new light?
These questions, in turn, lead to another--"Might they decide later?"That is, once they have a better idea what the value is?
If so, that leads to another question, "What questions might that approach raise?"
How might you contemplate a capital structure? If you view it as art, Sister Wendy Beckett has a brilliant answer. Best known as Sister Wendy, she's a United Kingdom nun. She is also an art critic. Her views on art are in a series of programs on the BBC. PBS has a one too, "Sister Wendy's American Collection."Here's how she advises one to appreciate art.
I would tell them to go to a museum and look at no more than two or three works, perhaps even two or three taken at random.
Look at them. Walk backwards and forwards between them.
Go and have a cup of coffee. Come back again.
Wander around the museum. Come back again.
Go to the shop. Buy postcards of them.
Look again, and go home.
At home, look at the postcards. Borrow from the library books on these artists. Go back again.
Eventually you will find they open up like one of those Japanese paper flowers in water.
You have to expend time and energy. If you don't want to do that, you can still get a lot of enlightenment and entertainment by just wandering around, but you'll never get the deep spiritual nourishment. 
If you invest time and energy to connect the dots in this book, in your experience and news reports, you'll form images that open up like a Japanese paper flower. You will view aspects of finance differently than you do now, especially if you assume the perspective of a public investor.
You'll prepare yourself to ask other questions about a company's capital structure such as:
If you operate in the entrepreneurial sector of the economy, you spend more time contemplating capital structures than most. If you are not such a person, why should you care how about this?
First off, ultimately, capital structures reflect human behavior, which is fascinating. Detail can cloud this, but, step back from it and you'll see a world view expressed that anyone can assess.
Secondly, the pace of new company formation is associated positively with an inventive, adaptive society. Improving the opportunity for new things is good for the economy and makes life more interesting. In his 2014 book, How We Got to Now  , Steven Johnson explores how inventiveness led to aspects of life that we now take for granted. Here are three examples:
1. The invention of the printing press lead to awareness that farsightedness was common as people began to read more. Glassmakers learned to craft eyeglasses. Lens making lead to telescopes, which made it possible for Galileo to conclude that Earth revolves around the sun. Conventional thinking, of course, was that the sun (and everything else) revolved around Earth.
2. Urbanization first lead to open waste in city streets. Sewers were invented to move sewage, but they contaminated water supplies with the bacteria that causes the deadly disease, Cholera. Discovery of how it spread led to water treatment technology that makes dense cities possible. Such technology also lead to the ability to make ultrapure water, which is needed to make the electronics that define modern life.
3. The invention of air conditioning made it possible for vast areas in the southern U.S. to be comfortably habitable. Over time, older people, who tend to prefer warmth and who favor conservative politics, migrated to the southern and western states. Political maps were transformed as the result of air conditioning.
The dots that Johnson connects show how innovation in one area can ripple change elsewhere, altering society in ways in profound ways. He observes, "We make our ideas, and they make us in return." 
A question to contemplate. The Fairshare Model balances and aligns the interests of capital and labor. If it becomes popular, what changes might cause to it ripple in decades to come?
If I haven't yet inspired you to explore capital structures, let me try a classic Madison Avenue strategy to get your interest. Sex. Seriously. It works for beer and cars.
Think about our popular understanding of capital formation now. If you were to ask people at random to define a capital structure or an aspect of capital formation, it would likely resemble a person-on-the-street interview about sex and sexuality in the 1950's, before the dawn of the sexual revolution of the 1960's.
Back then, sex education comprised of a talk about "the birds and the bees", a name so indirect that it conveyed nothing. Some of what was understood was wrong-headed, based on ignorance, hearsay or bad research. The perspective of heterosexual males framed the entire matter. Female sexuality was largely an undiscovered country and homosexuality was a forbidden zone.
Think about where we are now, generally. Discussions are franker, information is better and perspectives are broader. Consider how life changed as a result of women asserting their interests. Look at how much has changed in the U.S. with respect to same-sex marriage. Marvel at how the Roman Catholic Church is evolving on the acceptance of gays and lesbians.
The point being, these changes are the result of nothing more than ideas —it required no medical discovery or new technology—just a willingness to look at something familiar from a different perspective. Ideas that take root in popular consciousness can effect powerful social change.
Capital formation is sex between a company and investors. Here, conception is the valuation, its determination is routinely referred to as an "art."I've seen it called a "black art", which is as transparent as "the birds and the bees."It's determination is referred to in this manner for at least four reasons.
1. No one knows how to do it "right", so, both amount and the process to determine it is obscure.
2. There is no intrinsic value to a start-up.
3. Valuation is relative; relative to what someone else might pay. That means valuation reflects opportunism, which isn't considered polite to discuss.
4. There is a benefit to dressing up the conclusion with mysticism. Mystery inspires awe. Its deployed by a shaman when proclaiming how the stars, moon and sun will influence events. Transparency encourages debate, mystery discourages questions.
Like romance, capital formation is rife with awkwardness: asking someone out or being asked out on a date is like an entrepreneur asking for support or an investor being asked to provide it.
Most importantly, capital formation is about perspective. Take the classic male perspective on sexuality and assign that role to companies and to accredited investors (a/k/a wealthy). Next, take perspective on sexuality that was classically associated with female in the 1950s and assign that role to unaccredited investors (a/k/a average, public investors). The point is that the needs of unaccredited investors are usually a secondary consideration when it comes to setting valuation.
Today, popular knowledge about capital formation is comparable to popular knowledge about sex in the 1950's. The precursors of the sexual revolution in the 1960s was information. Researchers like Alfred Kinsey, William Masters and Virginia Johnson broke ground by asking, from a medical perspective, "What is going on here?"Writers, musicians and filmmakers asked the question from a cultural perspective. Information and discussion converged into waves change that profoundly altered social conventions.
In capital formation, similar enablers of change have been forming. Traditionally, college grads aspired to secure jobs in large companies but their allure has dimmed over the past two decades. It is now acceptable, even laudable, to plan to join or launch a start-up. Some even aspire to become venture capitalists, "The new superhero of the modern world."
Over the past fifteen years or so, angel investors have grown in number and organized themselves to an extent that would have been hard to imagine before that. Business incubators pepper the landscape. Companies have executives whose responsibility is to encourage innovation. Universities have professors of entrepreneurship, innovation and social networking.
In 1963, Bob Dylan released a song about the gathering winds of change, The Times They Are A-Changin' . The theme applies today. Better information about capital formation is spawning similar dynamics in the economy. Technology-the Internet and social networks-is transformative. Notably, in its ability to share information and mobilize crowds. Technology, in the form of the birth control pill, played a similarly powerful role in the sexual revolution.  In an essay in Time, Nancy Gibbs put it this way:
The 1950s felt so safe and smug, the '60s so raw and raucous, the revolutions stacked one on top of another, in race relations, gender roles, generational conflict, the clash of church and state - so many values and vanities tossed on the bonfire, and no one had a concordance to explain why it was all happening at once. Thus did Woodstock, caked in muddy legend, become much more than a concert, and leaders become martyrs, and the pill become the Pill, the means by which women untied their aprons, scooped up their ambitions and marched eagerly into the new age. 
Change is coming.
In capital markets, it feels like 1960, when the Pill was approved.
Our ability to discuss sexuality has come a long way since the 1950s. The Fairshare Model is a call to get valuation out of the closet. The discussion that ensues will have ramifications for how companies are financed and how ownership interests are set.
The women's movement has been good for men and for families, even when it posed challenges. Similarly, a movement to promote the interests of public investors will be good for entrepreneurs and society at large. And, there will be challenges.
Changes to the The-Way-Things-Are-Now always have challenges. Its been observed that change occurs when the pain associated with doing things differently is less than the pain of continuing to do it the way its been done . That suggests that public investors should channel Howard Beale—they should make their discontent known.
But, again, I propose something else-use positive energy to effect change in capital markets. Help develop a better way. Reformulate that observation to change occurs when the advantage of doing things differently is greater than the challenge of doing it the same way.
How can you do that? Talk about the Fairshare Model. Identify ways to make it work in industries and communities you care about. Then, when companies adopt it, consider investing in them. Be supportive shareholders. The reason, as you'll learn, is that the model promises to help companies outcompete others for desirable employees.
The point is that capital formation is approaching a period of profound change, and this change will ripple into other parts of socio-economic life that affect you and people you care about. So, even if you have little interest about capital formation now, this book will prepare you to engage in the lively discussions that lay ahead. How? Simply follow Sister Wendy's advice.
Take a look.
If I were to pitch the Fairshare Model to a movie producer, I'd need a simple story. A good one has a hero, a villain and a conflict. Here is what I would say.
The slumbering hero in this story is the Middle Class. For just over a century, she has been growing, coming into her own. Her quality of life steadily improved until the 1970s, when its foundations began to weaken. She has felt better at times, but her decline has progressed and it is now apparent to her that this has been happening. She feels anxious. The options deaden her spirit and dull her expectations for the future.
The conflict in this story is the lack of a promising solution. Our hero is of two minds. She can appeal to her community to change how resources are shared, but this creates discord. Or, she can find a solution herself. Her struggle is to re-discover her pluck, her optimism and ability to change the world around her.
The Fairshare Model covers an early part in the hero's journey, not the full story. Here, she learns that she has a latent power to shape capital markets by asserting her interests. Exercising this power has risks, however, and it requires her to develop new skills. The hero has self-doubts, but, the potential to overcome them energizes her spirit as she searches for how to use her developing power. Indeed, part of her optimism flows from the recognition that she may be able to help her entire community.
The villain in the story is The-Way-Things-Are-Done-Now, an immensely large and powerful ogre otherwise known as a conventional capital structure…but it has a key weakness.
The dramatic question is "What will she do?"
It may sound a bit crazy to use a Hollywood story line to describe a book about capital structures. But, as you contemplate what's really going on, I suspect that you'll come to agree that it is apt.
What follows is an invitation to intellectual exploration to change how young companies raise venture capital in public offerings. If you are so-inclined, it is also an invitation to intellectual combat, provided that you try to offer a better idea.
 "The Real Reasons to Worry About Stocks", by Brett Arends, Wall Street Journal, Oct. 17, 2014, http://online.wsj.com/articles/the-real-reasons-you-should-worry-about-stocks-1413558915
 Key line from "Field of Dreams"a 1989 movie about a baseball fantasy.
 Those who view life via a political prism will be surprised to know that on the Left-Right spectrum, this VC is a prominent liberal.
 Stream the "I'm as mad as hell"speech here https://www.youtube.com/watch?v=q_qgVn-Op7Q Per Wikipedia, the film, winner of four Academy Awards, was selected in 2000 for preservation in the U.S. National Film Registry by the Library of Congress as being "culturally, historically, or aesthetically significant"
 "Just History, Not Common and Not Core: PBS's 'How We Got to Now' with Steven Johnson, Oct. 14, 2014, New York Times, http://www.nytimes.com/2014/10/15/arts/television/pbss-how-we-got-to-now-with-steven-johnson.html
 Time, http://content.time.com/time/magazine/article/0,9171,1983884,00.html Nancy Gibbs is author of the book "Love, Sex, Freedom and the Paradox of the Pill: A Brief History of Birth Control"
Karl M. Sjogren *
Contact Karl Sjogren is based in Oakland, CA and can be contacted via email or telephone:
Phone: (510) 682-8093
The Fairshare Model Website
A native of the Midwest, Karl Sjogren spent most of his adult life in the San Francisco Bay area as a consulting CFO for companies in transition—often in a start-up or turnaround phase. Between 1997 and 2001, Karl was CEO and co-founder of Fairshare, Inc, a frontrunner for the concept of equity crowdfunding. Before it went under in the wake of the dotcom and telecom busts, Fairshare had 16,000 opt-in members. Given the rising interest in equity crowdfunding and changes in securities regulation ushered in by the JOBS Act, Karl decided to write a book about the capital structure that Fairshare sought to promote….”The Fairshare Model”. He hopes to have his book out in Spring 2015. Meanwhile, he is posting chapters on his website www.fairsharemodel.com to crowdvet the material.
Material in this work is for general educational purposes only, and should not be construed as legal advice or legal opinion on any specific facts or circumstances, and reflects personal views of the authors and not necessarily those of their firm or any of its clients. For legal advice, please consult your personal lawyer or other appropriate professional. Reproduced with permission from Karl M. Sjogren. This work reflects the law at the time of writing.