Slicing Pie Lawyer
Slicing Pie is not complicated. It is a simple formula based on the principle that a person’s % share of the equity should always be equal to that person’s share of the at-risk contributions.
At-risk contributions include time, money, ideas, relationships, supplies, equipment, facilities or anything else someone provides without full payment of its fair market value. Every day people contribute more and more to a company in hopes that it will someday generate a profit, go public or sell. Because contributions are constantly being made, the model is dynamic. It self-adjusts to stay fair.
There are two basic types of contributions. Cash contributions consume cash, non-cash contributions do not. Time, for instance, is a non-cash contribution whereas a reimbursed expense is a cash contribution. Slicing Pie normalizes cash and non-cash contributions by converting to a fictional unit called a “Slice”. A slice represents a normalized at-risk contributions. A slice is kind of like a poker chip.
An individuals % share = individual’s Slices ÷ all Slices
At any given time, the above formula will provide a perfect equity split. The formula applies until the company breaks even or raises enough capital to pay participants for their contributions. At this point the split “freezes” and subsequently determines the distribution of dividends or the proceeds of a sale.
Not only does Slicing Pie determine a perfect equity split, but also it will help you calculate a fair buyout price, if any, when someone leaves the company before breakeven.
Slicing Pie is used by entrepreneurs all over the world and is the fairest way to split equity on the planet. Interested in learning more? Pick up your copy of Slicing Pie on Amazon.com today!