Slicing Pie is a very straightforward approach to establishing a dynamic equity program in your new venture. The fundamental concept is that the person's share of the equity should, at all times, be equal to that person's share of the contributions they have made to date.
All of these contributions are at-risk, which means that these are provided by the members without full payment of the fair market value. Contributions vary across the team, but include time, money, network connections, equipment, various supplies, and whatever else is needed to fuel the company. Everyone is contributing in hopes that the venture will succeed and generate a profit. The model is dynamic in that the pie adjusts on a daily basis. As contributions are made they are reflected in the adjusted pie.
The way the dynamic model works is that it converts all the contributions to slices of pie. At any point in time each member % share is equal to that member's slices divided by the sum of all slices.
The result is that the venture can move ahead knowing that the equity is fair. Fairness creates trust and trust is an excellent platform upon which to build a venture.
Slicing Pie Deck - Structuring Equity
This Slicing Pie reading discusses the approach for using dynamic equity splits.
This Slicing Pie video illustrates an approach for using dynamic equity splits as outlined in the Intellectual Property reading, and specifically inadvertent partnerships.
In this assignment, do the following:
1. Review the Slicing Pie Presentation Slides
2. Develop a Slicing Pie Agreement using the Slicing Pie Agreement Form for your business project. Most individuals and teams will only need the Slicing Pie Team Agreement Form. Refer back to the instructional materials for help in developing your custom policies in your Slicing Pie agreement. If you have a more established, longer-running project, you may benefit from using the Slicing Pie Retrofit Guide and Excel spreadsheet tool. Because the Retrofit Guide and spreadsheet can be fairly complicated, please contact us prior to embarking on this process.
Slicing Pie Agreement Form - Use this document as your form to fill out the assignment.
Slicing Pie Team Agreement Form
Slicing Pie Agreement Form PDF Example - Use this document to see a full example of how the agreement is filled out.
3. Mark this assignment as complete if this is the last topic and assignment.