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Initial Public Offering - https://en.wikipedia.org/wiki/Initial_public_offering

Disadvantages of Going Public

  • Loss of control, and legal obligation to maximize profits. [1]

OSE Assessment

Here are several points that dissuade OSE from supporting IPOs. More specifically, OSE considers IPOs to constitute structural evil for the following reasons:

  1. IPOs contribute to creating a class of people dedicated to financial speculation. Outside of generating wealth for the parties involved, creating a class of speculators does little for the genuine progress of society - progress being defined as maximizing the good for the largest number of people, while remaining in harmony with natural life support system. This is parasitic extraction of wealth as a general rule, because it does not contribute to real production and it accumulates wealth for investors instead of the actual workers and producers.
  2. Because of the imperative to maximize profit, social and ecological justice aspects of operations must be abridged. Loss of control over the organization invariably means that socially conscious aspects of an operation are at risk.
  3. IPOs involve 3rd parties (investors, regulators) which have no authority to run a specific business, yet these third parties are allowed to do so with the IPO. This is a fundamental conflict of interest designed into the governance system.
  4. IPOs are part of the centralized and centralizing economic system that OSE aims to replace with distributed production. OSE would be going fundamentally against its mission - specifically its collaborative design and inclusive aspects. Collaborative design is not possible, as open source in hardware is yet unrecognized as a viable business practice, generally speaking. IPOs are not inclusive - as they are a part of a competitive win-lose operating system. Specifically, the business is designed to win, while social and ecological values are designed to suffer.
  5. It is challenging to run an ethical business, and the IPO structure makes this even more so due to the involvement of third parties. IPOs and ethical enterprise are not consistent with one another.

So the question remains - how do you raise capital? OSE is experimenting with open collaborative enterprise, and distributed funding mechanisms that involve the stakeholder more directly. Specifically, OSE addresses enterprise startup by involving potential entrepreneuers as co-developers/funders, and customers as co-developers/funders. This allows for a distributed funding mechanism, which must match the typical million dollar scales of investment. The challenge here is for the parties involved to simply recognize that collaboration will go farther, as the enterprise will end up decentralized. This means that more local empowerment and therefore support will need to be involved, and the growth will be assured by the higher proportion of value that the stakeholders receive.

This actually questions the 80/20 rule of wealth concentration - ie, investors get 80% of wealth while workers get 20%. If margins for large corporations are a few percent - the real question is what part is wages? 18-52%. If investors get a few percent - 5% - then the vast majority of revenue does go to workers.