Hell is truth seen too late.
- Thomas Hobbes
Keltham will now explain, in all grim determination, the basic concepts that:
- They are also going to own part of the Project themselves, in the form of 'shares', fractions of the Project that they own.
- The Project will generate profits, which the Project reinvests in more subprojects that generate more profits, mostly, but eventually the Project will start using profits to buy back its own shares, once it runs out of better things to invest in.
- As a simplified example, there's supposedly a billion people in Golarion. Imagine that the Project figured out how to build a widget that costs 1gp to make, but could sell for 2gp, and was worth 3gp to the buyer, and the Project managed to sell one widget like that to everyone in Golarion, but then had nothing else to do with itself so it bought back all its shares and closed down. The total profits would then be a billion gold pieces. Owning 1/10,000th of that Project now is then like owning something that will be worth 100,000gp later, but only if that Project actually succeeds.
- People don't get this share right away, any more than you get paid up front for the next 10 years of salary; it vests over time, though usually not on quite the same schedule that a salary gets paid out.
- You can, according to the contract to be signed, sell your profit-share to somebody else, but you probably shouldn't and definitely not without consulting Keltham... you know, actually, given the Manohar thing, Keltham's just going to write into the contract that he must legally be allowed to have a consultation session with any of the researchers before they sell any of their shares.
- Cheliax is investing a bunch of money in this project, and receives 'convertible debt' that can either get paid back at face value plus high interest before the Project buys back anything else, or convert into regular Project income shares at a discount that grows with but not as fast as the Project grows.
- One billion gold pieces, or one gold piece per person, which in unskilled labor is? - ten days of unskilled labor outside Cheliax, or five days within it, thanks - yeah, he'll stick with that wild-guess-round-number, that sounds like roughly the right ballpark figure for where the Project could end up. In general, Keltham is looking to increase the wealth of Golarion by much more than just 2 gold pieces per person; he is definitely looking to save more than 20 days of labor for everyone. But to get to that point, some of the work will be done by spinoff corporations that need to pay income shares to their own investors and researchers, though the Project might still take a share in those spinoffs if the Project is providing key ideas or training their people. You can't actually realistically capture half the gains to a whole planet of a technological revolution like this one, even in just the more material aspects. Keltham is going to try to grab a relatively larger share of gains at first, because he expects to have so many other projects that he needs to reinvest in, but in the longer run where the really large profits start to come in, no, it won't be half the gains. There comes a point past which it's sorta silly to try.
- So although it is a very wild figure, Keltham is guessing that the ten-year or fifteen-year profits of the Project should end up at somewhere near a billion gold. Could be a hundred million gold, could be zero. For it to be ten billion gold probably requires looking far enough in the future that people are wealthy enough to have that much to pay.
- The Project doesn't need to have started buying back its shares for you to get paid. The idea would usually be that somebody else buys those shares from you in the expectation that the Project will buy them back later, at an increased price that looks a lot like whatever interest rates are like around here. The share you get is usually one where, for you to sell right now, to somebody who didn't really believe in the Project, would not be worth too much compared to your regular salary. If you want to get incredibly rich this way, you need the Project to succeed and convince its skeptics so they want to buy your shares at some reasonable fraction of what they'll be worth after 15 years since Project start.
Eight days ago Carissa would have said that being wealthy beyond her wildest dreams and safe was all she wanted in life.
However, Carissa eight days ago was small and unambitious, and at this point her to-do list is so daunting that she's not totally sure a million gold makes much of a dent in it. She needs to figure out how Chelish people can be dath ilani without exploding, and that might require some fundamental revisions to Asmodeanism as taught to humans, because Asmodeanism as taught to Lawful beings is necessarily very different and no one is willing to just sit her down and tell her what it is. It is possible it will also require revisions to Hell, which - she's aware that objectively her odds of success at that can't look very high, but it's not like who rules the various layers of Hell never changes, or like the archdevils don't have a great deal of power within their own domains.
(It occurred to her yesterday, uncomfortably so, that an easier way to get what she wants might in fact be to donate her vast sums of money and go to Axis with Keltham. It's not tempting. Ironically it's not tempting because of Good impulses she's indulging as much as because of Evil ones; going to Axis might be an all right way for Carissa to go about her work having lost a part of herself but not all the parts of herself, but most people who try to do things in the world and don't end up with a billion gold about it will go to Hell, and so Hell needs to be able to use them. She doesn't actually want to escape eternal torment, she wants the eternal torment to be shaped right, and if that requires impressing Asmodeus enough to have the resources to displace an archdevil then -
- well, she isn't sure it's an insane ambition. She isn't sure it isn't, but she isn't sure it is. But a million gold pieces is barely even the first step.
Everything will be so much easier if she corrupts Keltham and then he can work on this with her.)
Sounds like something that is both reasonable to want and possible to achieve! Hints about how Carissa Sevar can solve her own problems for herself will be available if she prays for them, to Irori, outside the interdiction zone, though Irori realizes this is not a very likely confluence of events.
...has Keltham been getting any signs of understanding here or a lot of fixedly permanently cheerful expressions?
They seem to mostly be following along. The big problem is just that you're not supposed to sign contracts you mostly understand. But on the other hand, it's Keltham.
Well he's not going to have them sign anything now, of course, he's checking to make sure they even want the contents of the contract before he spends a lot of time drawing that up!
Equity allocations: 74% Keltham, 1.3% Carissa, 0.25% Ione, 0.2% Asmodia/Meritxell, 0.15% Pilar, 0.1% Gregoria/Peranza/Tonia, the remainder is for the Project to give its many future researchers and employees their own stakes, though they get smaller as people join later at higher base salaries and with reduced uncertainty of those shares' future values, or for Cheliax or other investors to convert its loan-shares into later.
Plans like this are generally drawn up with an intention that goes something like, if the Project is taking slower or needing larger investments and needs to sell more shares than expected, it first starts to come out of Keltham's reserve, especially if the delay looks like it's because Keltham is being less valuable or having less output than he was supposed to, but if the Project gets into bad-enough shape it may have to issue and sell additional shares that dilute everyone. This is part of the risk.
Conversely if the Project gets visibly on track to be hugely successful and starts earning early profits fast, which might be as simple as figuring out an early and general anti-plague sanitation measure that reduces the incidence of all plagues in all Chelish cities by 10% in a way that doesn't just restore to the equilibrium, they can expect that fewer total shares than Keltham currently anticipates will be issued, and their own shares will be accordingly more valuable.
Blah blah vesting schedules, these initial allocations will at their slowest vest over four years; hitting milestones can result in faster vesting, Keltham will draw up relatively informal milestones for them that he judges, and set more formal ones for himself and truthspell himself about them.
Even after shares vest, you shouldn't expect to be able to sell them to an outside buyer for what they're probably worth; people outside the Project know that people inside the Project have private information about how well the Project is likely to do over the future, and they'll discount apparent prices accordingly if the person inside the Project seems to want to sell. This difficulty in reselling causes researchers to expect to hold their shares for longer, which in turn helps to align incentives as the researchers think about how to make the Project actually be valuable in 15 years and not just look valuable at the time their shares vest. This is probably a much bigger factor here than it would be in Civilization; in Civilization any large project let alone this one would have Nemamel looking at it, if she were alive, or people only slightly worse than her if not, and people wouldn't expect apparent values to get away from actual prices by much.
It is proverbial in Civilization that no amount of clever planning can eliminate a very very large residual probability that all your Project's shares end up being worth exactly zero, which scary thought should be handled by meditating on your Cheerful-Plus base salaries that you arrived at without considering your equity.
It's also considered stupid in Civilization if the rest of your reasoning doesn't end up at a point where your valuable researchers can spend money right now in a way that gives them Slack, doesn't cause them to be distracted by silly things, buy productivity-related magic items and have somebody else organize their house for them, etcetera. Though obviously all negotiations are conducted on the basis of 'I have this valuable labor and I'm not giving it to you unless I'm paid and then once I have my money it's my own business what I do with it', not 'give me more money in the expectation that I'll spend it on myself in a way that makes me more productive'. If the Project starts needing to do the latter, it will probably indicate something wrong, but the repair algorithm would involve the Project paying for productivity things directly.
Though, in this case, there's stuff like intelligence headbands where Cheliax rents those to the Project, gets convertible debt accordingly, the Project loans headbands to people while they work, and they can use their salaries to buy those headbands if they wish so they'll still have them afterwards and then loan them to the Project themselves.
Anyways, don't get emotionally wrapped up in the sense that you'll be worth a million gold pieces in 15 years, based on your unvested equity allocations. That's not a thing that has happened to you, it's a collective plan to achieve something not yet achieved.
The contract sounds pretty good in principle and they'll probably want it though they'll have to read it first.
"It's - advised to go over a really serious contract with a devil, before you sign it, if it's about enough money to warrant the cost of summoning one."
Okay, Meritxell thinks, but it'd be nice to also separately have some way to see if the contract cheats them horribly.
Tonia is pretty sure everyone is just emitting meaningless noises at this point and she should go on having more money than she ever dreamed of and just worry about the project not falling apart completely.
"Of course. I'm not asking you to rely on just my truth spell and my fair division spell. I'd expect Cheliax and Lrilatha to want a look at this anyways, you're still their people and they consider this project an important matter."
"Are people okay with these specific equity divisions, not just the general setup?"
"It's derived based on the assumption that the fair and good-consequence practices for a world-reshaping company in Golarion started by one interplanar traveler, will be exactly the same as what they were for a couple of famous ultraprofitable companies in dath ilan started by individual supergeniuses. Because I have absolutely no hope of rederiving anything more sensible than that from scratch."
"If, hypothetically, it turns out that I'm actually better at teaching people Probability than you are, once I've learned it from you -"
"The point at which you start getting larger allocations is when you're doing things nobody else could do, not just things nobody else is doing right now. If you start learning from me or reteaching in a way that we just can't find any other researchers to compete with, that's the point at which you have the leverage to come to the Project and say 'two percent or I'm going home'."
"I would ask if Sevar is that much harder to replace than me, because, in fact, there aren't that many other people running around to whom Nethys's heralds are known to deliver prophecies. But I'm guessing from the numbers that Sevar's 1.3% is 0.3% her irreplaceability to the Project and 1% her irreplaceability to Keltham, which therefore comes out of Keltham's allocation of 75%."
"What would all these numbers look like if we do figure out how to retrieve the dath ilani true dead to here or something."
"If that was pulled off largely because of me, they'd immediately replace all the actual work I was doing, but I'd still fairly receive half the resulting gains they captured based on the algorithm I showed you; their decision to join doesn't accomplish anything until you add Keltham to actually retrieve them here. Though I'd just reinvest nearly all of that in whatever investment fund they built."
"If Cheliax or Asmodeus pulls that off largely without me, the incoming dath ilani form a new company and give me a small share corresponding to the role I played in letting Cheliax know that this was possible and valuable."
- nod. "Makes sense. I think."
She wants to be MORE VALUABLE than Keltham but it sounds like he'd still get a lot of the value-capture since he's the reason she noticed she could.
"This is - skipping over some things I thought I would have a chance to say to you in private, later, because I didn't realize this was coming up in quite this way - but my interest here is maybe 10% getting rich and 90% getting to go where Keltham goes and see what Keltham sees and learn what Keltham learns takaral. I suspect that's what Nethys wants too. Can we cut my share in half in exchange for an agreement like that?"
"That sounds a biiiit more personal. Not opposed to it, but, not exactly the sort of thing that the Project settles with you. And I'm not sure I'm ready to buy half your shares from you at that price."
"All right. It's just that, in reality, the money has very little to do with why I'm staying on, and I will be a little disappointed if I don't get what I was really hoping for."
"More than a little bit."
"Well, good for expressing that, because it is not something I am currently promising you or offering to trade to you. The money is meant to be good enough that, even if I wasn't going to take you with me when I left Golarion, if that happens, you would still want to work here because in fact you're still getting paid thirty times what you could make anywhere else. And then, someday, you'd spend that money on traveling this world or traveling other planes. I'm not saying you can't have that thing you just asked for, I'm saying that I'm not offering to trade it to you for your Project work. This large amount of money now, and maybe way more future money later, is what the Project is offering to trade to you."
"Civilization does consider it a best practice to draw a sharp line whereby the founders don't offer to trade away - themselves, their things, their lives, when they're starting a company like this one. The Project isn't owed that from me."