Are those that are evaluating AB5 aware of all the carve outs? Is this an attack on ride-sharing & food delivery specifically? The list is so long it's comical. Tweet storm needed (due to length of list). nfib.com/content/legal-… [next tweet]
We will start with "Occupational Exemptions"
AB-5 exempts the following industries:
Doctors, surgeons, dentists, podiatrists, psychologists, or veterinarians performing professional or medical services provided to or by a health care entity;
Lawyers, insurance brokers...
...architects, engineers, private investigators, or accountants; Securities brokers/dealers or investment advisers and their agents and representatives that are registered with the Securities and Exchange Commission, the Financial Industry Regulatory Authority or the State of ...
...California; Real estate agents, repossession agencies, direct-sales persons, commercial fishermen;
Individuals performing services under a contract with a licensed “motor club.” (whew 22 of those - done with that category, still more to come) [next tweet]
Next is "Professional Services Exemptions"
AB-5 provides carve-outs for the following “professional services:” (1) marketing professional; (2) human resources professional; (3) travel agent; (4) graphic designer; (5) graphic artist; (6) fine artist; (7) freelance writer...
...(8) barber or cosmetologist; (9) esthetician; (10) electrologist; (11) manicurist; (12) payment processing agent; and (13) IRS licensed tax professional.
OK so 22 industries & 13 professions are exempt. Done? Nope. [next tweet]
Next comes the "Referral Agency Exemption"
AB-5 provides an exemption for businesses referring customers to providers for the following services: (1) graphic design; (2) photography; (3) tutoring; (4) event planning; (5) moving; (6) minor home repairs; (7) home cleaning; ...
...(8) errands; (9) furniture assembly; (10) animal services (11) dog walking; (12) dog grooming; (13) web design; (14) picture hanging; (15) pool cleaning; or (16) yard cleanup. If the service in question is not on this list then it does not qualify for this carve-out. [next]
Wow 16 of those. So 22+13+16=51 pre-existing job types that are "exempt." Done? No. The entire construction industry is also exempt. That's pretty big, no?
Construction Industry Exemption
AB 5 provides special rules for working with subcontractors in the construction industry.
And just in case there was anyone they meant to let slide, but didn't think of in this list, there is a catch all.
Narrow Business-to-Business Exception
If the worker does not fit within any of the special industry exceptions, they might fit within the limited business-to-...
...business exception. To qualify, the work must be performed by a business entity formed as a sole proprietor, partnership, LLC, or corporation. The services must be provided directly to the contracting company, as opposed its customers and the contract must be in writing.
Hard to believe that the real problem being solved here is the rights of the worker when you have 51 job types + the entire construction industry carved-out.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
As a 3rd-party, curious observer, I have several naive, unanswered questions about the Stargate project. Obviously understand that they have no obligation to disclose. Here is list with responses wide open. I would love to be able to aggregate the best answers at some point.
1. Corporate Structure
The OpenA press release says that Stargate is "a new company." Is Stargate established as a standard C-corp, LLC, a joint venture, or something else entirely?
2. CEO Leadership
Will Stargate have an independent CEO? Who will lead Stargate on a daily basis, and how is that person chosen? Will they be as operationally intense as the XAI team that launched Memphis?
You can frequently read articles referencing VC "dry powder" and inferring that these large dollar amounts are "burning a hole" in someone's pocket & will imminently find their way to the market. I totally understand the assumption, but things don't really work this way. [cont]
First and foremost, undrawn VC dollars are not on the IRR clock. There is no urgency to draw them down. The money isn't actually at the VC firm, they are still sitting in the coffers at the LPs. No VC firm I have ever been exposed to feels "pressure" to "get dollars to work."
On the back of a market reset, & w/ portfolio valuations being slashed, GPs are mostly sharing bad news w/ LPs. No GP wants to look aggressive/carefree. Imagine being a teenager with two speeding tickets & a fender-bender insisting on taking the new family car out Saturday night.
Some (below) are arguing US capitalism would be better off if SVB had completely failed (also wiping out depositors). History suggests that out gov't treated big banks (2008) & big airlines (2020) FAR BETTER than SVB - in both cases fully protecting EQUITY shareholders. (cont)
In 2008, during the GFC, our gov't bailed out most of the major money center banks. Equity shareholders & bondholders kept whole. GS received help AFTER they received a preferred investment from Warren Buffet. Here is the real kicker (cont). investopedia.com/insights/too-b…
The GFC was the result of a specific flawed financial product that was an "offering" of these same banks. So far, the identified SVB failure was a bad risk management process. In the GFC case, the "bailed-out" players directly benefited from the flawed product.
As people come to terms with the weight of our new environment, they are slowly beginning to realize how radically things have changed. One area in particular that has changed - the required level of "corporate performance" needed to simply survive (let alone thrive). 🧵
2/ Building startups WAS a historically difficult endeavor (see chart). The past 5 years things have been "much, much easier." Cash was easy to come by (round frequency unprecedented), & no one was held to any profit goals, yet many companies still received high valuations.
3/ Cash is now hard to come by; investors are expecting solid unit economics & earlier profitability. Everything is immediately 5-10X harder. As such, survival is now depedent on hard-core, disciplined, top decile business execution, which no one learned in the past 5 years.
Many people are sharing great @Coach_Leach videos of his funny quips, but there are three things about him that in my mind stand above his unquestionably great humor. First he touched many lives 1-1. He took the time. Great stories like this abound:
Second, his coaching tree is immense. Many that learn an art/skill hide their secrets deep. But none of us learn if there are no teachers. Mike's willingness to give back to the sport he loved is nearly unprecedented. A great sign of a life well lived. hailstate.com/news/2022/10/1…
Lastly, Michael Lewis once called Mike Leach "a national treasure." It's hard to imagine that a college football coach could bring so much intrigue & happiness to so many people. I watched every game I could. So sad he is gone. So happy to see the universal love. 🏴☠️
Enjoyed e106 of @theallinpod. On FTX, I think they nailed a few important things: 1) Contradiction between smartest man in the room (pre) & "aw-shucks I don't know much" (post) 2) Sophistication of the corporate org (in size, scope, etc) also inconsistent with "aw-shucks" (cont)
3) Agree that SBF has built confidence in talking his way out of things. That said, doing voluntary depositions is a really bad idea. 4) One thing I don't think enough people mention - he intentionally created/discouraged proper governance. He insisted on no board, etc. (cont)
Interesting idea that he achieved things AS A RESULT of having a privileged upbringing. Probably impossible to prove, but certainly the credentials of his schools and his family relationships were helpful along the way. open.spotify.com/episode/75monu…