Although a dynamic equity model is intrinsically fairer to participants, fixed equity splits will continue to be the norm because 1) dynamic models are a relatively new concept and 2) fixed models allow experienced entrepreneurs to take advantage of less experience entrepreneurs.
Continue readingTo help you form your very own Grunt Fund, we have created an Excel spreadsheet that calculates slices of pie based on the model in the book. The Pie Slicer software provides more accurate and more convenient tracking. Download the Grunt Fund Calculator Download the Grunt Fund Calculator – Expanded to accommodate up to 20 Grunts! The […]
Continue readingTreating people fairly in a start-up company means giving them a reward that is proportionate to the contributions made relative to others participating in the business. In other words, if you make 75% of the necessary contributions to a company you should enjoy 75% of the benefits when that company someday starts generating excess cash […]
Continue readingThroughout the book, Slicing Pie, I reference a variety of additional material designed to supplement or elaborate on the content in the book. You can find this material here. Thank you for reading my book!
Continue readingIn the introduction to Slicing Pie there is a story about partnerships. In the story you and I decide to clean a house together for $50 and things get complicated. [box type=”info”] If you haven’t read the book you can have a free sample that includes the housecleaning story.[/box] Here is how the story would have […]
Continue readingOne initial concern that I get about Slicing Pie is the fear that founders won’t get enough of the pie even though they were there during the beginning. Most people assume that the earlier you join a start-up the more risk you are taking and the more reward you should receive. Therefore, early participants should […]
Continue readingIn Slicing Pie I recommend providing a sliding scale buyout to freelancers and consultants who provide services to the company. In this scenario the consultant can earn up to 200% of their base rate in pie if you are unable to pay them. The risk premium goes up a little each month so the earlier […]
Continue readingThere are four circumstances under which a person can leave your company based on two variables. The variables are “how” and “why”. The how can be that they decided to leave or you fired them; the why can be for good reason or for no good reason.
Continue readingFirst Published on Tech Cocktail (Tech.co) Not long ago, I was approached by one of my students at Northwestern, who was distraught over a situation in a fledging company that she had started in my entrepreneurship class. Her group had decided to split the equity in her company equally – 25 percent each. Now that […]
Continue readingFairness starts with laying out the rules and agreeing to follow them. This means that we need to allocate equity based on a set of rules.
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