Equity positions in companies we operate
When we hold equity in a company we operate, the founder gets a working team without writing a cheque for it. The cost sits inside the stake. The team earns from the company's progress, not from fees. The trade is a smaller share of a company more likely to exist and grow.
Earned from progress, not fees
A fund puts money in and watches. A studio puts money in and works. Because the operating team holds a stake, its incentives run with the company. The studio earns from the company's progress, not from fees for services rendered. That is the whole design. The founder never writes a cheque for the team. The operational cost comes out of stake.
Where the stake sits
The studio stake comes off the top, before any outside round, and it is usually the largest line on the cap table after the founders' own. Later investors dilute that line like any other. That is the alignment test. An operator whose stake gets diluted by a bad raise fights the bad raise. An operator paid in fees might not notice.