This document introduces a method called "Slicing Pie" for fairly allocating equity in startups based on each person's contributions. It advocates converting all contributions, both monetary and non-monetary, into "Slices" using fair market valuations. An individual's equity is then calculated as their number of Slices divided by the total Slices. The framework is designed to be flexible and self-adjusting over time as contributions and team members change. It also includes guidelines for what happens when people leave the startup or when the pie is "frozen" after major funding events.
11. You do all the work?
You bring in another guy?
Your partner wants to quit?
1,000,000 other things?
But, what if…
You want to quit?
Your CTO gets hit by a bus?
12. Your Share % >
The Value of Your Contribution
The Total Value
Your Share % <
The Value of Your Contribution
The Total Value
15. What We Need
• Perfectly fair
• Rewards contributions
• Provides motivation
• Accommodates team changes
• Flexible in the face of rapid change
• Gets rid of the gators!
29. Equipment
• New = Purchase price x 4 (cash)
• Less than a year old = Purchase price x 2 (non-
cash)
• Older than a year = Book value x 2 (non-cash)
73. What We Got
• Perfectly fair
• Rewards contributions
• Provides motivation
• Accommodates team changes
• Flexible in the face of rapid change
• Gets rid of the gators!