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To: Kirk © who wrote (67253)	3/8/2005 2:55:40 PM
From: Amy J	Respond to of 77400

RE: "As far as I am concerned, if a new company goes public and they don't show how they will pay and motivate their workforce without diluting my investment, I'll look elsewhere to invest." You don't think paying more cash on wage increases dilutes your investment, in an indirect sense? I think the answer is to place some restrictions around options that rule out potential abuse (require a certain % of the options to be held after vesting), place a non-exec on the compensation committee, etc. Regards, Amy J

To: Kirk © who wrote (67253)	3/8/2005 4:55:56 PM
From: Lizzie Tudor	Read Replies (2) \| Respond to of 77400

First of all, startups these days have to make money. Second, if you have to take the expense hit up front, then forget it." No, they only need to make money if they want to go PUBLIC. Once they are public, they have a much lower risk since there is a market for the shares they hold. Come on, no investor is going to pony up VC in a venture that is not at least poised to be profitable, these days. And as far as getting money while your startup is still bleeding red ink, fine if you want a miniscule valuation. Expensing options for startups is catastrophic and its silly to debate otherwise. The difference is that with startups, you presumably have a reasonable board that knows how to value the company even WITH all these phantom expenses. But we don't really know that.... yet.