For a while now, employees of ConsenSys, a New York venture studio based in Brooklyn, have been lamenting the management’s inability to keep their promise. They had been promised a portion of the ConsenSys equity, but over a year later, no disbursement has been made.
The discontent had been going on since and, four out of the seven former and current employees of the firm interviewed by CoinDesk felt they were lied to. All the promised made, either verbally or contractually, had taken a year and still, no sign of the company fulfilling them.
But finally, after repeated verbal assurances, Joseph Lubin, the Ethereum co-founder, and the company’s head, is determined to ensure they all receive their rightful ConsenSys shares. The company, according to an anonymous insider, will soon release an official policy addressing employee share options.
It is an issue that had dragged on for a while and left many feeling taken advantage of. And even though slightly over 100 early employees have reportedly received theirs, only a handful of them have successfully sold off their shares.
Generally, it has been a thorny issue, especially because of their inability to sell them. Some of those interviewed even termed equity as not being valuable.
But not everyone in the organization seems comfortable with Lubin promising to fix the crisis. The CEO, who allegedly owns over half of the entire ConsenSys shares and stakes in several successful incubated startups, is believed to be up to no good.
A source revealed that “Joe,” as he’s known, is eagerly hunting for potential investors, who include the Saudi Arabia’s Public Investment Fund, to snap up 10% of the ConsenSys equity. This has created a noticeable feeling of suspicion among a few shareholders who already fear that he might dilute the value of employee shares or even swap them for shares in incubated startups.
They believe that he’s probably promising them “spoke equity” on projects that never took off or even have no potential to attract investors. According to them, Lubin could be doing this since the firm’s cap isn’t structured to bring them any value.
CoinDesk had previously tried to explain the genesis of the problems bedeviling most of ConsenSys’ incubations. Most of them can’t attract investors because he fights to maintain majority shareholding. In fact, 3Box is the only one to have been successfully launched, having raised $2.5 million in venture capital.
Not every employee, however, sees a problem in how the organization is run. One gave a more optimistic view of the happenings, saying they get paid on time and often solve issues on bonuses swiftly and amicably.
There’s Another Problem
Still, it seems ConsenSys has another bigger problem to deal with. Of the seven who spoke to CoinDesk, six were of the opinion that the organization is “highly political.” According to them, there’s rampant unfair distribution as some of their colleagues handle various projects and, in turn, earn bonuses, equity, tokens or opportunities.
Describing the arrangement as “chaos,” one former employee seemingly believe that no clear line of authority exist in the firm. Six others alleged that the executives where to blame as they stole compensation from projects unlawfully. Only one of these dissenters, however, said the vice wasn’t widespread and only targeted a few “short-term” incentives.
But, while the issue of sharing ConsenSys equity has been around for over a year, even the new recruits are among the affected lot. As one of the anonymous group revealed, they too were “misled” while getting recruited.
Three executives have since left over the past few months, a testament to the growing disharmony within the firm’s inner circles as well. Rumors on employees’ frustration, meanwhile, continue to grow louder.