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Dwight Johnson -- Wanted: Linux Investment HOWTO

Apr 25, 1999, 23:56 (17 Talkback[s])
(Other stories by Dwight Johnson)

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by Dwight Johnson

With Red Hat and VA Research leading the charge toward the first Linux IPO, it seems that there should be a way for those who have invested so much of their time in the Free Software movement to invest financially as well.

The biggest winners in Linux start-up investing will be the 'Angel' investors who saw and commited to the opportunity well before the initial public offering.

In the past year, we have seen significant Angel investments in Red Hat, SuSE, Caldera, VA Research, LinuxCare and others.

These 'Angels', nevertheless, generally had, at a minimum, hundreds of thousands to invest and did so with the active participation of one or more venture capital companies to build a still larger pool of capital.

This process has effectively left out those with only hundreds or thousands to invest until the IPO -- and by then the potential multiple for profit will be significantly smaller.

We often hear the more successful Linux-related companies talk about how their aim is for 'all boats in the harbor to rise'.

But the reality may well be that, as a tital wave of big money floods in on Linux, the aspirations of individuals to provide themselves well-being from their years-long labor of love will be capsized.

Community has built Free Software and only community will keep it building. Companies which are poised to profit the most from the Free Software community ought to open up early investment opportunities for members of the community with limited means.

One way of accomplishing this would be with the creation of an investment fund open to individuals with limited means and with the specific mission of investing in Free Software and Linux companies.

To be a success, such a fund would have to have the right organization and management.

It seems unlikely that anything short of the backing of the best-established profit-making organizations within the Free Software movement such as Linux International, Red Hat, Caldera, SuSE, and VA Research could create such a fund.

Without a mechanism such as this to enable everyone to participate in the prosperity created by the success of Free Software, Free Software can never reach its true potential.

Dwight Johnson has been a computer professional since 1967 and is one of the founders of Linux Today.