alenlpeacock

I should have said "if they held exercised options." You are absolutely right if not exercised, and right that there are always risks of declining value if held. It is possible, btw, to exercise options prior to exit.

In practice, there is often a mandatory holding period for sale of options after IPO and even after sale of company when stock is converted to stock in the acquiring company, so that risk doesn't disappear by virtue of choosing to not hold.

Personally, I'd take the risk of decline in value over the non-risk of a guaranteed 20% reduction in value, but undoubtedly you can find examples of companies which do lose more than 20% over the 12 months after exit.

My point is simply that the arrangement to pay out bonus in the event of an exit begins in the hole 20% over the arrangement to give out stock. And the worst part of this is it doesn't even accrue 20% more to the company or to other stock holders -- it just evaporates due to bad tax planning. I guess those who experience this can take some solace in their loss buying more roads, missiles, schools, corporate tax breaks, or whatever preferred tax policy they'd like to imagine contributing to.

I'm not anti-tax. Taxes are good, and people should feel good about paying them, mostly. But low long term capital gains exist for a reason. The government is incentivizing the exact type of investment that stock options can represent.

I'll add another:

4) a bonus paid at time of exit will be subject to regular income tax, while options can (but don't always) benefit from long term capital gains tax.

Rough example: if an employee were to benefit to the tune of $1M due to sale of company, under this system, they would be taxed in the highest bracket, at 39.6%, plus FICA withholdings, so they'd end up getting less than $600K from the sale. If they had options instead, and had held them for at least a year, they'd pay 20% in capital gains, so they'd walk home with $800K.

Your plan is costing your employee $200K+ in this scenario, with no commensurate benefit to the company.

If you don't want to give options, why not do profit sharing instead? Let current employees who have been with the company longer than 1 year enjoy some cut of the profits each year the company has them?

> Where are the VCs getting all their money? Are mainstream banks exposed? Hedge funds? Corporations? Retirement funds?

VCs raise money from Limited Partners (LPs). Who are they? The regulars of course (fund of funds, foundations, endowments, large family trusts, pension funds, etc), but it seems pretty common for VC firms to also take on money from other wealthy individuals who made a lot of money from the machine, i.e., founders who got big exits and even other VCs or ex-VCs who likewise previously made bank.

In other words, there's a surprising amount of circulation or recycling of funds in the bay area tech scene. And that's awesome, win or lose.

That's a number we hit on experimentally. Constraining bandwidth below that, currently, causes the network backup part of the system to perform very, very poorly, resulting in your data not getting out to the system in any sort of reasonable timeframe.

This is in part due to factors that we have some control over and can tweak to allows less capable links to make progress (and we're hard at work on this) and partly due just to plain old physics: if you want to be able to push N GBs of data to the network, with some redundancy factor R, and allowing for self-healing of locations that may leave the network due to failure or otherwise H, and also allow some amount of access from other devices in the cooperative network, in some given timeframe T, there's some math that indicates how much bandwidth is needed theoretically, even with everything optimized.

The good news is, I believe we have some wiggle room here to optimize out still.

One of the reasons Space Monkey exists: http://www.infoworld.com/article/2856553/cloud-storage/you-c...

Sorry to hear it didn't work out for you, tckr. Since initial delivery, we have made some great strides at reducing bandwidth usage. Just to be clear, we only hear about this being a problem for users with really small uplink bandwidth. As a co-founder at Space Monkey, I've subjected myself and my family to living with Space Monkey on this type of a link -- I have the lowest tier DSL connection available from my ISP in my own home and run Space Monkey there without problem currently.

We have recently delivered shared folder functionality via the web client, and are working on shared folders for the desktop as well. I've been personally using a beta version of desktop shared folders for collaboration for over a year. We want to make sure we nail this experience before releasing it more broadly.

Thanks for backing us early on! Hope you might give us another look at some point in the future.

The confusion results from two different plans:

Plan A: buy the device upfront and own it. Price includes 1 year of network backup service. After the first year, if you want to continue the network backup, it's $49/year ($4/month).

Plan B: don't pay anything upfront for the device and lease it plus the service for $10/month for as long as you like.

Plan A is the only service available directly from the website currently, and we need to clarify the copy on the webpage -- thanks for pointing out to confusion.

Everything is private, every user has a unique key associated with their account, and every object (file and folder) has unique, individual encryption keys generated for it.

Because of the way data is encrypted, the system supports sharing at the file and folder level without granting access to other data in a user's filesystem.

The device needs around 400kbps of uplink capacity currently, though we are working to lower that.

In my own home, I'm on the slowest DSL tier that my provider offers, and only have 700kbps upstream. Space Monkey works fine here, and I can still do dual Netflix streams while it is running. Some users will have to manually adjust their bandwidth settings in environments like this.

Co-founder of Space Monkey here. I can assure you this was not an acquihire. At the highest levels of the org from CEO and down, Vivint believes in the Space Monkey vision. We're super excited to have their backing, and think you will be excited to see where this goes from here.

Being anonymous on the Internet? Who woulda thunk?

In other words, back to the good old days.

Now if we could just cut the cord between these companies and our identities permanently.

1. there have been several attempts (including two of my own!), but it's an ambitious project

2. yes, we're actually very interested internally in opening up large parts of the system long term. We're also very interested in creating a system that could outlive the company.

3. internal drives are currently 2-4TB. It's better than RAID. RAID is susceptible to correlated failures, does not survive fire, theft, or flood, and is much more labor intensive (swapping out failed drives within short windows, rebuilding arrays, etc).

4. Reliability/availability: all chunks of data are encrypted, chopped up into dozens of pieces with parity data added, and spread to dozens of locations (currently 40), only half of which need to be present for complete recovery. When availability of those pieces drops below a certain level, a self-healing process automatically recreates the missing bits. Performance: data can be streamed from the network at a high data rate, and we're currently at more than 10x the speed of competing cloud services for getting data into Space Monkey, but there's lots of room for improvement (we're not as fast as a local NAS yet, but soon will be)!

Unfortunately, the Kickstarter platform does not allow you to change the descriptions for reward levels once you've pushed the project live (you can add new rewards, but cannot remove or modify old ones).

This KS policy makes sense: they don't want people doing switch-n-bait on rewards.

But the very real consequence is that if the wording on a reward was not 100% clear, the only option Space Monkey had after publishing it was to add text to the product description on the main page, in the forums, or in updates. This is how Kickstarter works. Our hands were tied from changing that text, even though we wanted to.

Yes, under the subscription plan, the company is responsible for reasonable device replacement when they fail (if not due to abuse, etc).

That's why the subscription plan costs more: pure subscribers are subsidizing device replacement costs (perhaps for users other than themselves).

Under the ownership model, devices come with a 1-yr minimum warranty (we may service other components for free longer, e.g. harddrive has a longer warranty from vendor -- we're still sorting out how to apply that).

There was also no stated warranty at the time you backed (there is now), yet we replaced a device for you that failed, free of charge and without any hassle.

We have acted in good faith with you at every step of the process. I'm sorry it didn't work out in the end, but I'm at a loss what more we could have done. I think we've spent more money paying people to try to answer your questions than we ever took from your Kickstarter pledge.

So it sounds like you are mostly upset with our support staff? Could you help me understand what you believe would have helped to resolve this for you? What we did wrong?

Going back through the exchange, it looks like our staff offered you a complete refund very early on.

Maybe send me an email outlining an example of how you think the exchange should have gone? alen@ I'm sincere -- I'd like to improve the experience if you have insights to share.

The Kickstarter FAQ mentioned the return policy, and explicitly said that pro-rated refunds would occur once the device was returned.

The very first sentence of the Kickstarter page says, "Space Monkey is the next generation cloud. For $10 per month, you get a full Terabyte (1000 Gigabytes) of storage you can use anywhere, any time."

We haven't backpedalled on anything. The original rewards offered on Kickstarter stand. We will honor all backer rewards as originally offered.

We simply believe that the offering we are now giving to new customers is better in most ways than the one we gave to Kickstarter backers, so we wanted to let them in on the sweet action too, at their choice.

And to say thanks for backing us early, we threw in an extra 6 months of service ($60 value under their current plan), free, if they took us up on the offer.

We thought we were being cool about this, and the vast majority of our Kickstarter backers do think we are being cool about it, voting in support of this offer with their very real dollars by upgrading.

Those who are upset by this offer are very few in number, and we've offered refunds to all of them.

What else do you think we should do?

Evidence we've already provided you in our numerous correspondences:

- Kickstarter project called itself "Complete Cloud storage subscription service"

- Kickstarter project added a $349 level after a few days that included "device ownership". Update #1 on KS highlighted this new reward level. Discussion in forums about ownership option and how it differed from the pure subscription model where you don't own the device.

- Kickstarter FAQ for our project says, in response to "what if I cancel my subscription?", "We'll give you a pro-rated refund on your subscription once the device is sent back."

- Numerous posts in the comment areas about device ownership vs. pure subscription.

- While there are a small handful of others who, like you, didn't understand the subscription model, these are in a tiny minority of all backers. All of them either upgraded after talking with us about it, stuck with their current plan, or were offered a complete refund. None launched public attacks calling us scammers.

Lastly John, our last response to you via our customer support system was yesterday at 12:59, but you just said, "I waited a while after my last round of questions before writing this up. It was pretty clear that they had no intention of responding, or at least not within their own deadline."

Does it seem fair to you to keep asking the same questions over and over again of our support staff, and then launching a public attack like this on a holiday because we didn't get back to you for the 14th time within 24 hours?

Hi there, I work for Space Monkey. Let me shed some light on all this.

The vast majority of our Kickstarter backers have responded overwhelmingly positively to the offer. In fact, we extended the offer in large part because Kickstarter backers asked over and over again "can you make it so that we can own the device instead of lease it?"

The percentage of backers that have already converted from the $120/year plan to the $49/year plan is huge. We take this to mean that we did the right thing.

Having said that, we aren't forcing anyone to upgrade. If users want to stay on the $120/yr plan, we're happy to let them do that.

All users who are unhappy with this, or who were confused about device ownership are welcome to a refund. John included.

Yes, that is my experience too. But I don't care; google drive is for google docs, and google docs aren't useful at all on my desktop. I'm not sure why I even run the gdrive desktop app.

You might like http://spacemonkey.com (when it becomes available). Client-side encryption, 60x faster upload, 10x more space.

Salt Lake City, Utah, Full Time Software Engineers at Space Monkey (http://spacemonkey.com)

Space Monkey is changing how the world stores data, forever. Winner of the 2012 Launch Festival (http://techcrunch.com/2012/03/08/space-monkey-launch/)

Some of the deep tech we're working on: immensely distributed systems, p2p (DHTs, NAT traversal, fairness mechanics, etc), distributed filesystems (and local interfaces to them via FUSE et al), hardcore crypto, mobile, web, and much more. We use a lot of python, but also C/C++ and Go.

If you think you might fit in on a team of super bright, hyper-productive folks, please drop us a line at our jobs@ email address.

I did research in this area last decade, and I'm one of the authors of a survey paper that you might find useful if this subject is interesting to you: http://utopia.csis.pace.edu/dps/2007/jkile/content/2005-fall...

There is research stretching back 30 years in this area. Some of the results are very promising, but the field is severely encumbered with patents. I was even threatened with a cease-and-desist while doing a research project in this area for a graduate class.

There are some really good reasons to at least pay minimum wage to founders, including that it's really hard to get them health insurance if you don't. And, it's typically better to get enrolled in a health insurance plan early (when there are only a couple of employees) than later.

And there are lots of reasons (already mentioned in other comments) to pay them better than minimum wage.

Yes. Data durability is ensured by the network copy, not the local cache.

I encourage anyone who is thinking of implementing convergent encryption to read "Convergent Encryption Reconsidered" from the tahoe guys: http://www.mail-archive.com/cryptography@metzdowd.com/msg089...

(tldr; there are serious security/privacy vulnerabilities with convergent encryption)

It is undoubtedly true that high inflation is bad. Very bad.

What you want, ideally, is a currency whose value doesn't fluctuate much at all in the short term, and which has a long term trend towards slight inflation.

Deflation doesn't remove all incentive to invest, but it does destroy the "gotta keep ahead of inflation" one. I meant to be more explicit about that when I said, "you could still try to invest some of it to try to outperform the gain you get from deflation."