Why Investors Want Startup Founders to own Equity—Including OpenAI’s Sam Altman
Will OpenAI CEO Sam Altman get a big stake in his company worth billions of dollars?
In addition to salary, startup founders typically get an equity stake, to align CEO with investors with an interest in increasing the value of the company.
Sam Altman currently has zero equity in OpenAI and the company is considering a 7% equity stake to Altman.
Still, the talk about Altman’s equity stake, as well as the restructuring of OpenAI from a nonprofit to a for-profit company, highlights the tension between what many see as short-term financial incentives versus long-term societal risks, said Tracy Barba, director of venture and equity ethics at the Markkula Center for Applied Ethics at Santa Clara University. Investors and company leaders, she said, may begin to prioritize financial returns over the long-term societal consequences of technologies like AI—which, ironically, OpenAI's original nonprofit was created to prevent.
"Venture capitalists must confront whether they are simply backing growth or taking responsibility for the broader impact on society,” she said.
Tracy Barba, director of the Ethics Center Lucas Foundation for Venture Ethics , quoted by Fortune (republished by Yahoo! News).