Why It Is Crucial that Peer Production Companies Refuse Venture Capital Investments
Joe Justice of why the WikiSpeed car project adamantly refuses VC investments:
“”Aptera took Venture Capital, a few million dollars worth, in exchange for the VC firm having the right to cancel the project and retain all rights and IP if they got cold feet. These terms are common from VC. While we were in the X Prize with them, the VC firm fired the original team of engineers (7 of them I believe) and by contract those engineers are forbidden to work on anything related to the Aptera project or its technology ever again. The original engineers had personal loans that in aggregate were over a million dollars in order to produce the first working prototypes that attracted the VC in the first place, and now those engineers had no job- no way to continue working on their passion and area of expertise, and still had these massive personal loans. the only group that was paid were the VC, which then liquidated the assets of the company (www.youtube.com/watch?v=dGGhH1LlUUE). Many revolutionary companies are looking for VC to help them “make it big” or otherwise take outside debt and then struggle with the reports, predictions, and process imposed on them by the larger non-innovative firm until they are smothered and go under, or are simply liquidated outright for short term gains that seem to make sense to the larger firm who is using cost-accounting. WIKISPEED has no debt- even if we don’ sell another car for another 3 years we will be here, innovating and iterating our products.
I’ll clarify, although we met the Aptera original engineers and their VC, I wasn’t in the Aptera or VC firm board room during the events above. This is my take, from what I observed in the news and from team Aptera themselves. Those original engineers are probably the best to ask, but are likely legally bound by a gag-order with further financial penalties if they speak about certain parts of the business deal. I’m so glad we’ve open-sourced a version of our car to the public domain- no matter what silly contract we sign that will always be out there. It’s like an insurance policy that the project has produced something the world can choose to use.”
So, How is WikiSpeed funded then?
“We have micro investors at $10 a month (see the right-hand side of www.WIKISPEED.com) and that’s what drives almost all of this. At that level it’s too much administrative overhead to authorize stock, so instead we have an agreement that if we make it at recognize profit, we repay them, and if we can afford interest, we repay them with interest. This makes sure we won’t laugh all the way to the bank and leave a supporter in the dark. Then we have traditional investment at $10k or bitcoin equivalent and on up. We offer them a promissory letter or convertible debenture- standard Angel investment documentation. What we do though is investors never retain the right to liquidate the company and keep IP, this protects us from what happened to Aptera. email [email protected] to rock with us.
So far every investor has declined signing any promissory note with us- they have simply said “when you profit and it is sustainable for the company please repay me with interest.” The world is awesome, I never expected this level of altruistic support from the global community.” (http://www.reddit.com/r/Bitcoin/comments/xig8o/im_joe_justice_founder_of_the_wikispeed_my_team/)