How the cult of the founder has evolved in the eyes of investors
30 April 2021
The generally accepted form of a U.S. startup is now that of a monarchy. Companies and their founders are increasingly indistinguishable — a state of affairs that isn't going down well with workers agitating for a seat at the table.
Why it matters: It's nothing new for companies to be dominated and controlled by a single individual — Rupert Murdoch, Sumner Redstone, John Malone, and other media moguls spring naturally to mind.
- What's new is that this time around, there doesn't seem to be any kind of valuation discount when a company lives at the whim of its founder. Quite the opposite.
- Tesla is a prime example of a company that trades at a premium thanks to the imperial predilections of its CEO.
What they're saying: "When you get to a certain count — customers or employees or both — there's no pleasing everyone," wrote Basecamp founder Jason Fried in a recent blog post trying to take back more control of his company. "You can't — there are too many unique perspectives, experiences, and individuals."
- Similarly, Patreon founder Jack Conte recently uploaded a six-minute YouTube video explaining his decision to lay off 36 employees, despite recently closing a $155 million fundraising round.
- The video features Conte saying "I," "me," or "my" no fewer than 31 times, or about once every 12 seconds on average.
Context: It is now normal for tech companies to go public with a dual-class share structure giving control to the founders — even though doing so makes that company ineligible for inclusion in the S&P 500 index.
- Companies choosing the dual-class option (or having even more classes than that) include Coinbase, Snap, Airbnb and Bumble. All of them are associated closely with their respective founders.
- These founders are following the trail blazed by Mark Zuckerberg, who has retained dynastic control of Facebook for himself despite owning only a small fraction of the company. (Zuckerberg's control does not end even when he dies: He can bequeath it to his daughter, should he so wish.)
The bottom line: The cult of the founder has infected both the public and private markets to such a degree that investors no longer require a discount for allowing such a monarchical system.
Transcripts show George Floyd told police "I can't breathe" over 20 times
Section2Newly released transcripts of bodycam footage from the Minneapolis Police Department show that George Floyd told officers he could not breathe more than 20 times in the moments leading up to his death.
Why it matters: Floyd's killing sparked a national wave of Black Lives Matter protests and an ongoing reckoning over systemic racism in the United States. The transcripts "offer one the most thorough and dramatic accounts" before Floyd's death, The New York Times writes.
The state of play: The transcripts were released as former officer Thomas Lane seeks to have the charges that he aided in Floyd's death thrown out in court, per the Times. He is one of four officers who have been charged.
- The filings also include a 60-page transcript of an interview with Lane. He said he "felt maybe that something was going on" when asked if he believed that Floyd was having a medical emergency at the time.
What the transcripts say:
- Floyd told the officers he was claustrophobic as they tried to get him into the squad car.
- The transcripts also show Floyd saying, "Momma, I love you. Tell my kids I love them. I'm dead."
- Former officer Derek Chauvin, who had his knee on Floyd's neck for over eight minutes, told Floyd, "Then stop talking, stop yelling, it takes a heck of a lot of oxygen to talk."
Read the transcripts via DocumentCloud.