Serial entrepreneur and social impact investor Terri Maxwell had an business concept that would require outside investment. Several clients encouraged her to start a community for Conscious Entrepreneurs based on her authentic business growth methods.
She knew her Conscious Business Growth Platform™ could benefit the millions of purposeful entrepreneurs wanting to make a bigger impact through their business, but she’d already lost money investing in purposeful concepts through equity-based partnerships that failed to meet their potential.
Equity splits are often unfair, and partnerships are frequently fraught with disagreements that ultimately lead to failure. Maxwell’s concern was that if she created an equity partnership with several other entrepreneurs based her conscious business growth methodology, that the equity calculations would be not only difficult to navigate, but hinder the success of the entity. At the same time, she understood that collaboration would make the conscious business growth community significantly more successful.
“I devoured the Slicing Pie Handbook that weekend, and then emailed Mike. I was seeking a “triple win” model that would allow us to create a powerful investment vehicle for investors (Win #1), as well as protect my Intellectual Property the business would be based on (Win #2), but also keep the total investment low so the platform’s price would be reasonable (Win #3). Slicing Pie seemed to meet all of those requirements. Mike provided a digital copy of the book for potential inventors interested in joining our start-up team, which helped them understand how we would collaborate fairly and still launch within a year.” Terri Maxwell said.
- Six months after investors signed on, Shift/Co pre-launched its prototype, which allowed early customers to provide feedback as the platform was being built.
- Within a year, Shift/Co completed development of the technology to support the Conscious Business Growth Platform™. As the business was nearing the break-even point and finalizing its entity structure as a Public Benefit Corporation, Shift/Co, PBC froze its investment pie.
- The “pie slices” from the Slicing Pie model were calculated and shares in Shift/Co, Public Benefit Corporation were granted.
Maxwell knew that in the conscious entrepreneurial start-up space as well as Social Impact ventures, there should also be a balance between Investor ROI (Return on Investment) and stakeholder value to keep the product affordable for customers, while creating value for shareholders.
To accomplish this balance, an enterprise needs “sweat equity” (work delivered at no cost in exchange for equity.). This reduces the financial investment requirements, however it typically involves risk for those providing the sweat equity.
“I’ve tried several equity calculators and models over the last decade, and never found one that equitably balanced the benefits of cash investments compared to sweat equity/expertise, both of which are critical to a start-up striving to keep its costs low. In addition, it’s always hard to value the core intellectual property. Slicing Pie is a perfect solution to balance these various resources and create the Triple Win we were searching for.” Maxwell noted.