zlacker

Really neat corporate structure! We'd looked into becoming a B-Corp, but the advice that we'd gotten was that it was an almost strictly inferior vehicle both for achieving impact and for potentially achieving commercial success for us. I'm obviously not a lawyer, but it's great to see Open AI contributing to the new interesting structures to solve hard global scale problems.

I wonder if the profit cap multiple is going to end up being a significant signalling risk for them. A down-round is such a negative event in the valley, I can imagine a "increasing profit multiple" would have to be treated the same way.

One other question for the folks at OpenAI: How would equity grants work here? You get X fraction of an LP that gets capped at Y dollar profits? Are the fractional partnerships/transferable if earned into?

Would you folks think about publishing your docs?

>>estsau+(OP)
Yes, we're planning to release a third-party usable reference version of our docs (creating this structure was a lot of work, probably about 6-9 months of implementation).

We've made the equity grants feel very similar to startup equity — you are granted a certain number of "units" which vest over time, and more units will be issued as other join employees in the future. Incidentally, these end up being taxed more favorably than options, so we think this model may be useful for startups for that reason too.

>>gdb+c1
>>Incidentally, these end up being taxed more favorably than options, so we think this model may be useful for startups for that reason too.

Is this due to long term capital gains? Do you allow for early exercising for employees? Long term cap gains for options require holding 2 years since you were granted the options and 1 year since you exercised.

>>estsau+(OP)
I'm also interested in how this corporate structure relates to a b-corp (or technically, a PBC)

> OpenAI LP’s primary fiduciary obligation is to advance the aims of the OpenAI Charter, and the company is controlled by OpenAI Nonprofit’s board. All investors and employees sign agreements that OpenAI LP’s obligation to the Charter always comes first, even at the expense of some or all of their financial stake.

One of the key reasons to incorporate as a PBC is to allow "maximizing shareholder value" to be defined in non-monetary terms (eg impact to community, environment, or workers).

How is this structure different from a PBC, or why didn't you go for a PBC?

>>floatr+Z7
We needed to custom-write rules like:

- Fiduciary duty to the charter - Capped returns - Full control to OpenAI Nonprofit

LP's have much more flexibility to write these in an enforceable way.

>>gdb+G8
How do you actually define "Fiduciary duty to the charter"? Since charters tend to be vague, and are definitely not legal documents, almost anything can be said to be aligned with the charter.

Similarly, what's stopping an investor from implicit control by threat of removing their investment?