Ownership and Moral Shares

DRAFT ONLY  2018-Sep-11

Proposal for discussion

Ownership

TSIS is the name for the project, but it is unlikely to be the name of the resulting web platform.  Nonetheless, let’s call them both TSIS in this document.

I’m not sure of the best ownership structure, and solicit feedback and suggestions.

Down the road, I saw TSIS as owned by a trust or something similar, belonging to the user community, or better yet, the world at large.  Whatever it takes so that it is never captive to narrow interests.

I saw it being directed by select users and stakeholders from around the world who have demonstrated that their interests align with the TSIS project.  This is the idea of moral shares.

At first I foresaw being a sole owner, to keep it simple and flexible until better decisions can be made.  On one hand, if TSIS does particularly well, I have a couple other similarly motivated projects in mind.  On the other hand, the optics suck for donors.  Moreover, I don’t want to be that rich, and if I were to die, there should be an easy transition.  How can I protect these interests, without making it about me?

There are other considerations as well:

If TSIS operates around the world, it may have to split into different entities for different countries or regions (e.g. america, europe, china, russia) for various legal reasons (e.g. EU privacy rules).  For this reason, I imagine TSIS being a trust that holds multiple corporations.

Also note that there be more than one version of TSIS, with competition among versions, which share some of the subsystems but operate with different incentive architectures.   May the best man win.

Moral Shares

When projects like this are crowdfunded, donors expect to get something, or rather, the habit is to give something to donors, because they respond better to it.

Due to securities laws, we cannot offer ownership to the general public except within strict limitations.

The idea of a moral share is that early supporters should have a say in the ongoing development and operation, if their interests align with those of TSIS.  The hope is to grow a community of passionate and responsible people, eventually able to assume full or partial direction over TSIS.

However we don’t want TSIS to be locked into abiding by the recommendations of individuals who don’t have aligned interests, or who concentrate ownership of moral shares.  It would be easy for someone to grab many shares to sway votes, or to disrupt the community for ideological reasons.  Furthermore, wealth should not be able to gain invisible power, because that feeds the self-feeding power of wealth, which TSIS stands against.

Due to securities laws, it must be clear that a moral share represents no legal ownership or obligation, only an unenforceable moral obligation at the sole discretion of management.

To avoid securities implications, we might call moral shares something like “invitations” or “fee waivers” for initial admission into the direction community, so that there’s no implication of ownership.

Parallel Communities

The original plan was to try crowdfunding from individuals, but prepare for other sources.

It also makes sense to accept money from non-individuals, such as corporations, institutions, governments, or wealthy donors, and for them to be able to participate in direction communities.   However it seems best to group these donors into subcommunities, based on their mutual interests.  This is so that holders have the most in common in their subcommunities, and so that the expression of their interests is more clearly visible to other subcommunities.  These subcommunities might then someday contribute delegates to an actual board of directors.

The qualification for receiving a moral share might be something like this::

  1. Individual: USD$70 per share, class determined by precedence (see table below); individuals may only use one share at a time, but may own and transfer more shares to other individuals
  2. Publicly owned Trust or Corporation: USD$700 per share, no voting limits
  3. Government/Institution: based on GDP of the source country, GDP/20,000,000,000, no voting limits

e.g. World Bank figures for 2017, https://data.worldbank.org/indicator/NY.GDP.MKTP.CD

  1. Wealth and everything else: same as publicly owned corporations, but separate category

It makes sense to afford higher weight/priority to earlier donors, to encourage involvement when money is harder to raise.  For example, something like this:

Moral Share

Class                       

Total Donations

(in Aggregate)

Target Achievements **

(not binding)

A US$700,000 Proof of Concept
B US$7,000,000 Core system and initial User Testing
C US$70,000,000 Complete system, Testing, Marketing, User Support

These A/B/C classes may cut across subcommunities, because the aggregate is independent of any one.  Different subcommunities would then have very different proportions of A/B/C/shares, but there’s nothing wrong with that.

The following is an uneducated draft version of an offer for individual donations.   There may be a need to further minimize negative terms and restrictions.  People won’t want to read legal fine print saying “no, no, no, no, no!”  and then say “yes” to a donation.

Draft Offer For Individual Donations

For every USD $35 donated, you may elect for your name to appear on a web page recognizing your donation, to be sustained for 7 years or more.

For every USD $70 donated, you may also claim one (1) moral share in TSIS.   If and when TSIS supports this, a moral share shall entitle the registered holder to participate in an online community to recommend future directions for TSIS, collaborating with other holders according to final TSIS designs.

A moral share offers constructive influence over a significant global development.   The hope is to grow a community of passionate and responsible people, able to assume full or partial direction over TSIS, if everything evolves as hoped.  This is a directional hope, not a promise.  I ask you to trust me with something I love.

Terms: A moral share represents no legal ownership or obligation, only a moral obligation at the sole discretion of management. Moral shares will not represent a  legal claim of any kind, and community outcomes will not be binding on any aspect of TSIS.  Until further notice, at sole discretion of TSIS management, moral shares may be cancelled and further moral shares of any class may be awarded without limitation.  You must be an approved TSIS user in good standing to participate, which may impose costs and agreements.  Moral shares are null and void in any jurisdiction where they may violate applicable laws, including but not limited to securities laws. Other limits, restrictions, and requirements may apply.

To reward early donations, shares will belong to classes according to the precedence of donations, and earlier classes may be weighted more highly.  The following table summarizes class donation targets:

Moral Share

Class                       

Total Donations

(in Aggregate)

Target Achievements **

(not binding)

A US$700,000 Proof of Concept
B US$7,000,000 Core system and initial User Testing
C US$70,000,000 Complete system, Testing, Marketing, User Support

 

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