On Feb 23, 2010, at 4:41 PM, Alex Hillman wrote: > On Tue, Feb 23, 2010 at 4:37 PM, Tara Hunt <horsepig...@gmail.com> wrote: > I won't get behind some org structure that we don't fit into, but I would > happily get behind setting a new precedent (would work for many projects that > have disparate stakeholders). > > AMEN!!!!
Finally! I just wish I had the same ability to get across a concept to this group that Tara has. :) To revisit, I've not been proposing "an org structure that doesn't fit", I was proposing finding a structure that does. On Feb 23, 2010, at 5:05 PM, Eli Malinsky wrote: > For what it's worth, our org has developed a Constellation Model of > Governance (http://socialinnovation.ca/blog/constellation-model-of- > collaborative-social-change) that has allowed a number of groups, big > and small, to work together without incorporating. Clearly, your collective has never been sued. :-) Fred Wilson from Union Square Ventures in NYC just published a great post on Corporate Entities where he covers "liability protection" as a reason for why you form an entity: http://www.avc.com/a_vc/2010/02/corporate-entity.html I know that Alex has offered to hold and protect the domain and Tara and others have championed the "no entity" approach but let me just draw out an unfortunate scenario for you, one that doesn't assume Alex will turn die (we really hope not) or that he'll turn evil (we truly think that is unlikely): We collectively work on this new domain coworking.com and selflessly contribute. Coworking thrives to orders of magnitude what it is today, and all is good. No entity was created and none has been needed. A few years go by and Big Evil Corp (BEC) sees opportunity cost lost to these feisty yet undefinable coworking operators and they comes along and ask Alex to be included on coworking.com. Alex tells us all and we all immediately know intuitively that BEC doesn't get coworking, its offerings are not coworking nor do we realistically expect that BEC ever will get coworking. So we all almost unanimously vote against their inclusion with the exception of someone on the list who happens to be the nephew of BEC's CEO. And all continues to be good. Except, 6 weeks later a process server shows up at IndyHall and serves Alex with a lawsuit for restraint of trade and a variety of other sordid and sundry things which none of us not in the legal profession understand. Alex goes to his personal lawyer and pays $250 out of his pocket for advice and his attorney tells Alex they have absolutely no case and offers to try to get the case throw out as a frivolous suit for an additional $1000 in fees which Alex gladly pays out of his pocket. Another 6 weeks goes by and Alex finally learns from his lawyer that the judge won't dismiss the case, but that the lawyer will gladly defend Alex if Alex pays $5000 for a retainer. Alex comes to the list and 10 of us we gladly offer up $500 each to defend Alex against BEC. Feeling triumphant Alex waits another 3 months for court. Court begins and BEC's lawyers throw Alex's lawyer a curve ball. BEC's legal has been working for the past three months and has generated over 1000 pages of supporting documents based on comments on this list and more. Alex's lawyer informs Alex that it will now cost $25,000 more to defend because of the need for discovery and deposing witnesses, travel cost, etc. Dejected Alex pleads to the list again and is able to gather another $1000 from each of those 10 original donors but he's still $15k short. So Alex being the incredibly principled man he is decides to pull $15k more out of his own pocket and fight these bastards at BEC. He spends the next 3 months mostly focused on the trial and lets his business operations falter. But it's the right thing to do for the cause. Court date is finally here. Alex and his lawyer are prepared and they are going to nail BEC to the wall on this day. However BEC is prepared and has uncovered more evidence of discussions on the list in the past 3 months and they add it as evidence to their case. Alex's lawyer sheepishly says "Alex, I'm really sorry but we're going to need another $25k..." Unfortunately, Alex is financially tapped out at this point and his lack of focus on his businesses during the trial has him at the edge of personal bankruptcy. He heads to this list for more funds but nobody offers up any. A few even accuse him of misappropriating funds. Alex's life is in a tailspin. Alex's lawyer calls and says that BEC's CEO Will Swindle wants to talk. Without any other visible option Alex talks with Swindle. Swindle tells Alex that he understands Alex's predicament and hates to see such good man be destroyed by something like this. Swindle tells Alex that he's sorry it's gone this way for Alex but that he has shareholders to answer to and they demand that be pursue what's in their interest. Swindle tells Alex and he does have an option that his shareholders would be satisfied with: Swindle will authorize BEC to pay all of Alex's legal fees to date and reimburse all people who have contributed to his legal fund all in exchange for ownership in the coworking.com domain! Swindle will even hire Alex to promote BEC's "Coworking" options in the major markets that have proven viable like New York, Philadelphia, San Francisco, Los Angeles, etc. with a goal of attracting all existing coworkers to BEC offerings. However this "job offer" is a three year contract that must be agreed to for BEC to drop the lawsuit, and it comes with legal liability if Alex can be found to be undermining BEC's competitive pursuit of customers from existing establish coworking facilities. Further, Swindle implies they have yet another lawsuit that a subsidiary will pursue against Alex if Alex doesn't agree. Alex is now faced with two awful choices: 1.) working for BEC to undermine everyone else in the community that he was so instrumental in advocating for, or 2.) personal bankruptcy. We pretty much know how bad #1 would be, besides we know our good Alex would never do that anyway, so let's assume Alex defiantly chooses #2. During Alex's personal bankruptcy BEC makes it clear to the judge that one of Alex's assets is the domain coworking.com and BEC lobbies the court to provide that BEC get's the domain as their remedy for their lawsuit that Alex declares bankruptcy to avoid. And since nobody is now willing or able to pay a lawyer to defend against this inappropriate lawsuit, the court gives BEC coworking.com! BEC begins to throw money at every market where there is a coworking space operating not solidly in the black (i.e. most of them.) From them on both coworking as an "undefinable wild, wild west" and the domain coworking.com as we knew it are both gone. And all this because a vocal group was adamant early on that no structure be put in place to provide Alex liability and defend against such an action. Sad, really. Implausible? Only if you've never been a party to a lawsuit. It's disgusting what happens when someone who has plenty of money and lawyers on staff can to do those who don't have an infinite war chest to defend, even against frivolous lawsuit, at least in the USA. Yes, an entity could be sued too and we might still loose coworking.com but it wouldn't destroy Alex financially and it wouldn't be viewed by others early on as "Alex's problem." Having a proper entity can insulate us each from liability and do our best to protect against these types of attacks. For example, the entity could have insurance against such legal attacks to ensure we have an equivalent war chest if it get sued. FWIW. -Mike Schinkel Ignition Alley Atlanta Coworking http://ignitionalley.com P.S. I figured you all might enjoy a story more than a simple rant. :) -- You received this message because you are subscribed to the Google Groups "Coworking" group. To post to this group, send email to cowork...@googlegroups.com. To unsubscribe from this group, send email to coworking+unsubscr...@googlegroups.com. For more options, visit this group at http://groups.google.com/group/coworking?hl=en.
