Scoop! The robo-lawyer startup DoNotPay has paid more than $1 million to employees and investors in its first-ever dividend. Such a financial gesture is a novelty among startups because it requires them to have profits to distribute. DoNotPay was in a position to spread the wealth, its founder and chief executive Joshua Browder tells Business Insider. The company is profitable and has a sum on the balance sheet greater than the capital it's raised to date. Browder briefly considered a buyback, in which stakeholders sell their shares back to the company for cash. But, Browder said he didn't think he'd have any takers. The startup is just doing too well. "The only deal we could push through was one where we give them money for nothing in return," Browder said. Here, we get into buybacks versus dividends, the tax implications, and why dividends could become the norm for aging and profitable startups. https://lnkd.in/evJbjAMU
I think this practice should spread and here is why: https://www.linkedin.com/posts/pascallevygarboua_startups-ai-activity-7181644181306540033-SIIS?utm_source=share&utm_medium=member_ios
Tom Puijpe
8mo
From a pure investment return perspective every company should eventually pay dividends (directly or indirectly).
Rohan Bansal
8mo
Unheard at the moment but a move that hopefully gradually becomes the norm. Always good to reward employees and investors for their faith and keep them motivated to deliver!
Nilay Doshi
8mo
Extremely commendable and this raises trust and confidence on the part of investors and employees. Kudos on being a leader and leading from the front!
Murtuza Kutub
8mo
The only deal we could push through was one where we give them money for nothing in return - How’s that a deal? But kudos to the initiative and the fact that he wanted to spread the wealth :)
Brandon Hoffman
8mo
Very interesting move by Joshua Browder !! Great scoop Melia Russell !! Wonder whether we will see more of this with VC backed startups, and whether VCs will embrace it as a way to get cash (DPI) but maintain their full equity position
Kathryn Tewson
2mo
Also they’re getting sued by the FTC
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8moReddit's stock surge might inspire tech IPOs, but it's intriguing to see a startup sharing wealth before going public. This approach could redefine startup growth and IPO strategies, potentially setting a new trend for tech companies and their relationship with Wall Street.