Super interesting idea. One of the cons could be that having your employees not personally invested in the outcome of your venture could make them less likely to be "fully committed" (i.e. long hours, going above and beyond). You might be worried about higher levels of apathy -- "if this doesn't work I still have a job".
If the business works, I'm thinking the transition from the fund swat team to "real" employees might be difficult as well, probably at a time when you need to be firing on all cylinders.
If the business works, I'm thinking the transition from the fund swat team to "real" employees might be difficult as well, probably at a time when you need to be firing on all cylinders.