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RE: Decius and Rattle have reached an impass


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RE: Decius and Rattle have reached an impass
Topic: MemeStreams 2:30 pm EDT, Jun 20, 2009

As Nick has decided to air our dispute publicly, a response is obviously in
order. On many levels this makes sense, because the consequences of this
disagreement effect the entire community, and because an external perspective
might be helpful. With that, I thank you for taking the time to read about
something that you shouldn't have to get involved with. I'm sorry that we
have not been able to resolve this between us.

Nick and I are equal partners in Industrial Memetics, the corporate entity
that owns MemeStreams. This is reasonable because we've both contributed
approximately equal amounts of time and code to the project. However, since
the beginning I have born almost all of the financial responsibilities
associated with operating the site. The two primary servers belong to me,
I pay the monthly hosting costs, I pay for most of the domain names, and
I file the tax returns.

At the heart of this disagreement is the fact that I've never bothered to
write off my expenses on our corporate tax return. The reason is that in
order to write them off, I'd have to account for them accurately, and
time and effort associated with doing that isn't worth the money to me.

A couple years ago Nick decided to put advertisements on MemeStreams. I
was opposed to this decision from the outset for two reasons. The first
is that you can directly extrapolate the amount of money you are going
to make from the amount of traffic you get, and we were not going to make
a lot of money. The second is that any money we do make must be reported
on our annual tax return, thus generating the paperwork nightmare that I
have been trying to avoid.

Against my objections, Nick proceeded. At the time he believed, for some
reason, that we were going to make more money than we were going to make.
We concluded that we would not book the revenue until we actually received
money from Google. In some respects it was an experiment - how much would
this bring in? As I predicted, it brought in next to nothing. After several
years we have not generated enough revenue to reach the minimum amount
that prompts Google to cut you a check.

However, we have generated some revenue. Obviously, at some point, we're
going to have to take receipt of it and book it. It would be my preference
that we simply take the money, do the paperwork, and shut the ads off
so that we don't have to deal with this anymore. Nick doesn't agree. He
has recently become very concerned about dealing with this now and
dealing with it in his way.

In April, he started the conversation off by proposing that we take receipt
of the money from Google, and spend it as follows:

Part would go to registering the corporation in the State of Maryland
(where Nick lives).
Part would go to Nick's wife (who is a CPA) in exchange for her assistance
fixing up our books to Nick's liking.
The rest would be split between Nick and I 50/50.

There are many reasons why I object to this but those of you who have run a
business can probably see the primary problem - I'm spending $125 a month on
hosting and Nick wants to split the remainder of the revenue with me without
first covering my cost basis. Of course, I didn't want that revenue in the
first place, but that's beside the point. If we have revenue it ought to go
toward the company's expenses and not into Nick's pocket.

I told Nick that if he wants to take over the organization of the company's
finances that he ought to take responsibility for some of the company's
expenses. I am not interested in allowing him to proceed with his financial
rearchitechture before he takes on some responsibility, because I don't want
to end up holding the bag if he fails to make good on his commitments. Once
he is taking his fair share of the burden of operating this site, he can do
whatever he wants with the books as far as I am concerned.

This seems like a simple thing to organize but unfortunately, Nick and I have
been totally unable to reach an agreement about how to proceed with it. Last
night, Nick asked me whether I wanted to remain a C corp or reorganize as a
nonprofit and open the source code. I told him that I don't care (I really
don't) as long as he takes care of the paperwork. From that point our
discussion descended into a yelling argument. I don't really understand why.

Ultimately, if Nick and I can't come to an agreement and cannot continue
to be partners in this thing, one of us will have to exit the company, or
we'll have to shut the whole thing down. Last night I had no interest in
having it out with him in the streets of Bethesda, so offered to exit the
company. This seems to be the only logical course of action if a reasonable
compromise cannot be reached, and it certainly looks that way.

RE: Decius and Rattle have reached an impass

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