Risk-Based Hierarchy System

A revolutionary compensation and governance model that rewards actual risk-taking, not just participation.

Core Principle

Risk = Value. The more existential risk you take, the more you should own and control.

Types of Risk (Debt)

1. Financial Risk

Personal funds invested (not VC money)
Below-market salary accepted
Opportunity cost (could make more elsewhere)
Living expenses debt (founder living on savings)

2. Career Risk

Reputation on the line (founder vs employee)
Bridge burning (leaving stable job, angering powerful people)
Resume risk (failure hurts founder, helps engineer)
Industry blacklisting (taking controversial positions)

3. Relationship Risk

Making enemies (like forking Jae’s project)
Partner sacrifice (family supporting founder)
Network risk (choosing sides in conflicts)
Trust investment (vouching for others)

4. Time Risk

Years committed upfront (vesting periods)
Expertise investment (learning proprietary tech)
Market timing (joining pre-product vs post-revenue)

Risk Scoring Formula

Risk Score = (Financial Risk × 3) + (Career Risk × 4) + (Relationship Risk × 2) + (Time Risk × 1)

Example Calculations

Early Engineer (High Salary)

Financial Risk: 0 (market salary)
Career Risk: 0 (good resume line either way)
Relationship Risk: 0 (no bridges burned)
Time Risk: 1 (standard commitment)
Total: 1 point

Early Engineer (Half Salary)

Financial Risk: 2 (significant pay cut)
Career Risk: 1 (some opportunity cost)
Relationship Risk: 0
Time Risk: 2 (longer commitment for equity)
Total: 10 points

Technical Co-founder

Financial Risk: 4 (no salary, personal investment)
Career Risk: 3 (reputation tied to success)
Relationship Risk: 2 (leaving previous team)
Time Risk: 4 (multi-year lockup)
Total: 28 points

CEO/Visionary Founder

Financial Risk: 5 (all-in financially)
Career Risk: 5 (complete reputation risk)
Relationship Risk: 5 (making powerful enemies)
Time Risk: 5 (decade+ commitment)
Total: 40 points

Compensation Structure

Three Pillars

Salary - Covers living expenses (inverse to risk)
Equity - Rewards risk (proportional to risk score)
Tokens - Rewards contribution (based on usage/impact)

Distribution Model

Equity % = (Individual Risk Score / Total Risk Score Pool) × Equity Pool
Token Weight = Base Allocation × (1 + Risk Multiplier)
Voting Power = Equity % + (Token Holdings × Time Locked)

Special Cases

Organizations (like Samourai Coop)

Risk scored as entity
Internal distribution their decision
Recognition of collective risk-taking
Special “Alliance Partner” status

Individual Contributors in Corporations

Personal risk score separate from employer
“Moonlighting clause” for personal equity
Recognition of individual reputation risk
Bridge between corporate and startup worlds

Retroactive Risk Recognition

When someone’s past actions created value:

Calculate historical risk taken
Award proportional equity/tokens
“Founder’s Debt” - recognition of unpaid risk

Zooma’s Samourai Example

Risk Analysis of Zooma’s Commitment:

Financial: €50k personal emergency fund (not company money)
Career: Betting 8 years of reputation on UB
Relationship: Public commitment to potentially controversial project
Time: Long-term support commitment

This demonstrates maximum risk across all categories - exactly what should be rewarded most.

Implementation Phases

Phase 1: Founding Team

Score founding members’ risk
Establish baseline equity distribution
Document all commitments

Phase 2: Early Employees

Create risk assessment framework
Offer risk/reward choices (salary vs equity)
Track risk scores transparently

Phase 3: Investor Integration

VCs scored on value-add beyond capital
Strategic investors get governance weight
Pure financial investors get returns only

Phase 4: Ecosystem Partners

Organizations can earn risk scores
Cross-investment recognition
Network effects in governance

Governance Integration

Voting Power Formula

Votes = (Risk Score × 0.4) + (Token Holdings × 0.3) + (Contribution Score × 0.3)

Decision Rights by Risk Tier

Tier 5 (40+ points): Strategic direction, pivots
Tier 4 (25-39 points): Product decisions, hiring
Tier 3 (15-24 points): Feature priorities
Tier 2 (5-14 points): Implementation details
Tier 1 (0-4 points): Participation only

Anti-Gaming Mechanisms

Verification Required

Financial risk: Show bank statements
Career risk: Public commitments
Relationship risk: Documented bridges burned
Time risk: Legal vesting schedules

Decay Functions

Risk scores don’t compound forever
Recent risk worth more than old risk
Continuous contribution required
No coasting on past risk

Benefits

For Risk-Takers

Finally get rewarded for real skin in the game
Not diluted by late-joining “safe” players
Governance power matches actual stakes

For Cautious Contributors

Clear path to increase ownership
Can choose safety with transparency
Still valued for contributions

For Investors

Aligned incentives with founders
Can increase stake through value-add
Clear governance framework

Examples in Practice

Scenario 1: Series A Hire

Two Options Presented:

Market salary (0 risk) = 0.1% equity
Half salary (2 risk) = 0.5% equity
No salary (4 risk) = 1.5% equity

Scenario 2: Strategic Partnership

Samourai Coop wants to contribute:

Scores risk of association
Contributes resources
Gets proportional governance
Members can also participate individually

Scenario 3: Acquisition Risk

Founder sells previous company to fund Amigos:

Massive financial risk (all eggs in one basket)
Career risk (if Amigos fails, no fallback)
Relationship risk (previous investors unhappy)
Gets major equity position reflecting this

Vesting Philosophy

Core Principle: Risk determines shares, vesting ensures commitment, flexibility enables life.

Universal Vesting Rules

All shares are vested - No one gets instant liquidity
Monthly vesting - Not quarterly (avoids people staying when they don’t want to)
Risk determines amount - Vesting determines timing
Life-friendly pauses - Because humans aren’t machines

Founding Members Special Rules

Founding Cliff: 6 months (vs 12 for others)
Founding Vesting: 3 years (vs 4 for others)
Founding Acceleration: 2x on major milestones

VC Carve-Out Structure

VC Cliff: 0 months (immediate start)
VC Vesting: 2 years (shorter commitment)
VC Conditions: Value-add metrics required

Employee Flexibility

Standard Structure:

12-month cliff
4-year total vest
Monthly vesting post-cliff

Life Pause Option:

Pause vesting for up to 12 months
Keep vested shares
Resume with preserved strike price
“Sabbatical clause” for life events

Why Monthly Vesting?

Quarterly vesting creates perverse incentives:

People stay 2.5 months unhappy to vest
Creates “vesting jail” syndrome
Reduces team morale

Monthly vesting means:

Leave when ready, not when vested
Only lose ~2 weeks average
Team has people who WANT to be here

The Philosophy

Traditional tech rewards two extremes:

Pure capital (VCs with no operational risk)
Pure execution (employees with guaranteed salaries)

We reward the middle ground:

Operational investors (founders, angels who help)
Investing operators (employees who bet careers)
Committed partners (orgs that stake reputations)

This creates a new class: Risk-Taking Builders.

Employment Flexibility Model

Life Happens Policy

Principle: We only want people who want to be here. Life is complex.

Pause Options

Sabbatical Pause (3-12 months)
- Vesting pauses, not terminated
- Keep health benefits (if applicable)
- Guaranteed re-entry at same level
- Strike price preserved
- Risk score maintained
Project Pause (1-6 months)
- Try a new project/startup
- Vesting continues at 50% rate
- Can return with lessons learned
- “Boomerang bonus” if successful elsewhere
Life Event Pause (As needed)
- Family, health, personal
- Case-by-case basis
- Maximum flexibility
- No questions asked

Re-entry Advantages

Returning contributors get:

Original strike price (if lower)
Accelerated vesting catch-up
Risk score bonus for loyalty
“Alumni network” benefits

Why This Matters

Reduces burnout - Take breaks without losing everything
Encourages honesty - Don’t fake enthusiasm
Builds loyalty - Flexibility creates commitment
Attracts talent - Life-friendly policies win
Creates alumni - Former members remain connected

Individual Recognition in Organizations

Dual Participation Model

For individuals in organizations (like corporates):

Organization Level - Company gets allocation
Individual Level - Person gets personal allocation

Example: Corporate Employee Contributing

Jane at MegaCorp contributes to Amigos:
- MegaCorp allocation: Based on resources provided
- Jane's allocation: Based on personal risk/contribution
- If Jane leaves MegaCorp: Keeps personal allocation
- If MegaCorp exits: Jane keeps contributing

Recognition Mechanisms

Moonlighting Agreements - Clear IP separation
Innovation Time - 20% time contributions recognized
Reputation Building - Individual brand matters
Portable Equity - Follows the person, not the job

Next Steps

Score all current contributors
Create risk assessment tool
Legal framework for implementation
Transparent risk ledger
Regular risk reassessment
Design pause/resume workflows
Create alumni network structure

The goal: Make risk-taking not just rewarded, but celebrated and systematic - while recognizing that builders are humans with complex lives.

Sources

Zooma’s Commitment Letter: Internal Samourai Coop document demonstrating maximum risk commitment across financial, career, and relationship dimensions

risk-based-hierarchy