the onda

The other day I ran across a post by Rafe Furst which I found incredibly provocative on the possibility of investing in individuals as annuities. That is, rather than backing a particular startup because of the individuals within it, why not just back those individuals directly by investing in them in return for a lifetime percentage of their income?

At first glance, the idea seems wacky, a bit like the dystopian vision described in one of the novels I read this summer, "Unincorporated Man," where individuals spend the bulk of their time stressing about their own personal stock price in their sisyphean task to buy a "controlling share" of themselves.

However, isn't this type of arrangement what millions of 18 year-olds do today when signing for up a crushing amount of debt in the service of their education? Wouldn't most of these folks be better off with a contractual obligation of say, 2% of their income at any point in time (it would at least be more sensitive to material life changes)?

I'm not sure that I've gotten to a place where I feel comfortable with the concept, though it may have more to do with the poor cultural legacy of contracts that look like indentured servitude, and not cold economic thinking. What is true though is that we seem to be looking at all sorts of creative new funding models— from the much more benign patronage-based model behind Kickstarter, to investing in increasingly smaller chunks (and even different vehicles)— all powered by the Internet and fueled by the general disillusionment with current economic institutions, be they banks, large companies, or even traditional startups.

Whether any of these new experiments will prove durable is questionable; what is not, however, is that we are undertaking them.