Capitalistic Renaissance 13: A value choice
The Capitalistic Renaissance calls for new public companies to make a value choice – a choice between greed and sharing – in the design stage of their ownership structures.
The first option based on greed is to keep the majority of the ownership and have less guaranteed revenue and therefore less capitalization. The second option is to share the ownership with the customers and have guaranteed sales and therefore more capitalization.
In other words, the founders or principals of new public companies have a choice to make. Their first option is to keep more ownership and get less equity value from selling products and services to the few. Their second option is to keep less ownership and get more equity value by selling their products and services to the many.
When consumers use credit to purchase the widgets from old public companies, they enjoy the utility value of the widget but suffer the consequences of debt caused by their credit purchase. This free-credit-generated debt that has to be paid back is now replaced with “free equity” from new public companies. Debt payments come out of the consumer’s pocket. Equity is put into the consumer’s pocket.