Today Jules and I went to the notary to establish our own holding company. These companies are set-up to allow us to participate in other companies by means of shares. It is a direct result of our work for GoldDirect / SaveGuards, because we have worked for them in exchange for shares. Start-ups are always in short of (financial) resources and by paying us in shares instead of hard cash, we have been able to support them during a longer period and with greater impact.
Besides these financial benefits for our client, we believe that participating has two major advantages.
- It’s more honest, we share of profits AND losses. In the traditional ‘pay by the hour’ mentality, you get paid no matter how good (or how bad) your deliveries are. In a collaboration like this, our work has a direct impact on our reward. So it provides an extra incentive for us to work our asses off.
- The collaboration is much more strategic. We have a long term commitment and are much more involved with the business. Now we are able to make long term plans, see what come from these plans, learn, improve and do it again, but better. So whenever we finish a project, we’re not standing outside again, taking all these valuable knowledge with us.
But there are downsides as well.
- It is risky. There are a lot of variables that determine the success of our businesses in the future and failure is always an option, leaving us with nothing.
- Lack of liquidity. We are a fairly small company and in order to pay the rent each month, we need money now, not somewhere in the future.
- Things might turn ugly. A good contract is meant to help us when the shit hits the fan, but it will be very likely that relations will be spoiled by then anyway. So how will we move on from there?
At Koos, we see a lot of opportunities in working in exchange for shares. Today our first shares were officially transferred to our holdings. Our first participation is a fact now, but because of the risks and downsides, we have to be very selective with these participations.
So we are experimenting with our own business model and this is not the only form of collaboration we have cooked up. As soon as these plans will turn more concrete, we will write about it here on our blog.
Cheers, Robbert-Jan
