*delurks to bitch* As a business owner who has spent many hundreds of thousands of dollars trying to put together an ESOP that actually delivers benefit for Australian and US staff, this budget measure is - in a word - fucked.
Whether you're focussed on growth or exit - it's still fucked. All businesses should be aiming to become sustainable, growing businesses. If nothing else, it gets you the best exit valuation. But the budget? Fucked. m PS Apologies for the language - I'm still stunned by the stupidity of this move. And don't get me started on the $77B for 5 extra submarines or King Kev treats the national credit card with less reverence than that girl in Confessions of a Shopaholic - and he doesn't even have the killer heels to show for it. On Mon, May 18, 2009 at 3:01 PM, Elias Bizannes <elias.bizan...@gmail.com> wrote: > Well yes, tax throughout history has created changes in society. This is an > example of how business behaviors would change. > > But it is worth considering, Australia is very different from the US tech > scene. Whilst we do have a share market to exit our investments from, we > lack a rich ecosystem to acquire companies. The web2.0 era in the States was > fueled by Google, Yahoo, Microsoft, News Corp, IAG and others. We lack > established tech companies that can reinvest into the ecosystem, and rely on > the media companies to provide this alternative exit option - who are having > some serious issues themselves to stay afloat. > > I've noticed this has affected the culture of the entrepreneurs in > Australia. More focussed on a sustainable, long term business than a short > term build-to-flip. All the top startups in Australia (which disappointly > number in the tens), seem more focussed on growth than exit. So in that > light, is there really any value in stock options? > > Perhaps what we might see more is remuneration based on percentage of > revenue or net profits. > > Re the silicon beach lobby group: as dozens of people have privately said to > me before - yes - there are plenty of ways we could expand this effort. > Personally, I feel over-stretched in my volunteer efforts at the cost of > other things, but would love to see someone drive something like this. > > Elias Bizannes > http://eliasbizannes.com > > > > On Mon, May 18, 2009 at 2:25 PM, mmp1 <missingmatt...@gmail.com> wrote: >> >> Thanks Elias. >> >> So, it almost sounds like - "you can only give stock options to >> service (union) workers now (say factory workers earning say less than >> 60K)". Comrad's unit. >> >> or i could be cynical. >> >> I think they fail to realise that the strategic goal of equity >> (especially during startup phase) (as well as all the aligning >> strategic goals stuff...blah blah blah) is not possible on the same >> scale for everyone. Not saying it wouldn't be nice, but equity is an >> expensive form of finance for a business (all be it one that the >> founders have ready access to and a large degree of control over). >> >> One of the hardest things as a founder is always balancing how much >> and when to give away that precious equity. You want to spend it only >> when you are going to get an above average return (ie. early phases, >> or establishing phases where you going to ask staff to put in 150% >> efforts, but want to offset the penalty fee's ie. overtime etc to a >> later stage using equity, plus offer a multiplier effect for staff to >> want to give 150% ie. they are giving up time with family, >> contributing valuable ideas into the organisation etc). >> >> If you have an organisation engaged in raising capital (fund raising), >> most founders themselves have to subscribe to options. Without any >> detailed guidelines from the ATO this could be a real mess. ie. raise >> 2 million (say for a 20% share), founder gets say 1M share options >> that vest over 2 years with a value (on paper say) of $10M (whatever), >> you could pay $100K's of tax, and have no income, money etc for >> years ? Would this be a correct understanding? What about dilution >> over time ? This sounds like it isn't even being taxed as captial >> gains but as income tax (so you can't offset against other capital >> gains over time). And do you then still have a capital gains tax on >> top of this. >> >> If you applied this same logic to options trading, its almost sounds >> like : you purchase share options on the stock exchange, they tax you >> at your marginal rate for what you pay for the options, then when you >> sell it you pay tax again on the profit (capital gain). >> >> What is ironic is they want to spend 10's of Billions on NBN, so we >> can develop "next generation businesses" here, but then we remove >> access to a vital instrument used elsewhere to build those next >> generation businesses in this country. >> >> Also, it seems that it may effect you if you are considered "resident >> for tax purposes" but work for say a US based company. You will be >> paying tax on US options (in US dollars). What effect would this then >> have on companies say with a head office/ salesoffice in the US, but >> still send the development work back to OZ? >> >> >> Is it time again to reconsider the silicon beach lobby group, now >> there seems to be a very well defined set of issues to lobby about ? >> >> >> > > > > > -- ATLASSIAN - http://www.atlassian.com --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Silicon Beach Australia mailing list. No lurkers! It is expected that you introduce yourself: http://groups.google.com/group/silicon-beach-australia/browse_thread/thread/99938a0fbc691eeb To post to this group, send email to silicon-beach-australia@googlegroups.com To unsubscribe from this group, send email to silicon-beach-australia+unsubscr...@googlegroups.com For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en -~----------~----~----~----~------~----~------~--~---
