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Hello, I’ve recently purchased your software and so far so good. But are there any lawyers in the UK or Greece who can help me get this legally binding?
Yes, please contact me through http://slicingpie.com/contact/ and I’ll put you in touch with some great attornies in the UK.
Still trying to locate attorney in Canada to help with paperwork. Nearing launch date. This is second request. Thanks, Dan with Tea Journey http://www.teajourney.pub
Contact Cindy Ho from dsavocats.ca!
Thanks Mike. Our magazine launches in a few months, the slices are working their magic. Warm regards, Dan
Hi Mike, really love your work and think it can very equitably deal with changes in contributions. One thing that I keep wondering though is whether it should not also include a “interest” component. People who put money or time in early should be compensated for their patience to get to a return more than people who put something in just before profitability is reached. What are your thoughts on adding an interest component to each weeks calculation where the current balance of all slices receive an additional percentage amount? That way early contributions are valued proportionally higher the more patient they are. Or is that already compensated through the bigger slices they get in the beginning?
Thank you for sharing your thoughts.
Unless it’s a loan, interest is generally not customary. In the Slicing Pie model contributions are weighted using a multiplier. I recommend 4x for cash and 2x for non-cash. This normalizes the contributions and accounts for the time value of money (interest), taxes (cash is post-tax) and scarcity, It’s all built into the model.
I don’t quite get it. Imagine that I put in $100,000 to buy machinery at the start (as that was cash, we’d value it as $400,000). Then over the course of a year we manage to pay all employees at market rates through an additional $100,000 that someone else puts in (so their total slice is worth $400,000 as well). And then we need a last investment of $100,000 for another machine to be profitable. It is put in by a third person 12 months after starting the business. Now we all own 33% even though my initial investment had been at risk for 12 months and the last person’s money for only a day.
Wouldn’t it be fairer to calculate a monthly “interest rate” for each slice to account for the fact that my money had been at risk longer? Each portion of interest could be added to the calculation of the slice.
Or would that be double dipping?
Equity investments generally don’t accrue interest. Even if they did, the 4x multiplier far exceeds any logical interest rate so the increase is essentially a rounding error.
As a practice, by the way, you should consider financing equipment rather than pay cash. This would help you reduce the number of slices in the pie.
Here is an article that might help shed more light: http://slicingpie.com/the-magic-of-mutipliers/