This post encapsulates every junior startup in Australia.
In Western Australia, we have a plethora of start-ups known as junior exploration companies. These companies discover almost all the mineral assets that major mines extract, which power the Australian economy.
Typically, management leaves their high-paying jobs with the aspiration of building something significant. They take a risk to create something meaningful.
Due to limited funds, they entice staff with equity incentives. These companies are funded by retail investors who dream of striking it rich with their after-tax dollars.
They spend the money drilling holes, assaying samples, analysing results and building up mineral deposits.
If they strike it rich, they spend more money, employ more people and bring in other parts of the industry, continuing the cycle.
Ultimately, they either build a mine or a major takes them over, and shareholders pay their share of CGT to the government.
Now, if we remove this incentive at the outset, none of this happens. Without an incentive to make it, why take the risk?
Australia will never have a SpaceX under the new CGT laws.
Everyone is happy to pay their way! No one is suggesting paying zero CGT.
What we’re saying is don’t mess with a system that’s working perfectly for startups like exploration companies.
This isn’t about creating housing for first-home buyers; it’s about a tax grab to fuel incessant out-of-control spending.
4,400 SpaceX employees became millionaires last Friday.
and there is only one person behind them. Elon Musk
but this is not a story about Elon.
it's a story about a welder from Mexico who didn't even know what SpaceX was.
Juan Hernandez took a $28/hour contractor job in 2015.
SpaceX handed him a $10,000 equity grant and let him buy more shares out of his paycheck.
he said yes without fully understanding what he was signing.
that decision is now worth $880,000.
Trevor Hise's parents begged him to take the safe road.
stable salary. pension. General Electric.
he chose SpaceX instead.
12 years. 100,000 shares. $13.5 million.
he is 37 years old and semiretired.
his words: "the magnitude of this has been ridiculous."
before the IPO, over 100 employees quietly grouped to negotiate a wealth management deal covering $5 billion.
none of them had ever needed a wealth manager before in their lives.
400 of them are now worth over $100 million.
welders. technicians. cafeteria staff.
software IPOs have minted millionaires for 30 years.
this is the first one where the money went to the people who built the rockets.