Karl Sjogren is writing a book about a company performance-based capital structure for companies that seek to raise venture capital via a public offering. It is called The Fairshare Model because it balances and aligns the interests of investors and employees…capital and labor. It has implications for how to attract funding to companies that have poor access to equity funding but who have the ability to attract an affinity group of public investors. Significantly, it has potential to help companies attract and manage human capital.
Twenty years ago, Sjogren co-founded of a company called Fairshare that sought to promote what is now considered equity crowdfunding. If an issuer had an IPO, adopted the Fairshare Model capital structure, passed a due diligence review, and allowed Fairshare members to invest as little as a $100, Fairshare would allow the company to pitch its offering to Fairshare members for free. Fairshare attracted 16,000 opt-in members before it collapsed in the wake of the dotcom and telecom busts. The JOBS Act has brought about innovation in how stocks are sold. Sjogren believes the time is ripe for innovation in how IPOs are structured, hence, he is reprising the Fairshare Model concept in a book that he expects to publish in 2017.