Mike Moyer's Blog, page 13

Slicing John’s Bicycle Attic

In the book, Slicing Pie, there is a case study called John’s Bicycle Attic. The case covers a fictional business and how the managers used the Slicing Pie method for allocating equity. Below is a demonstration of how the case plays out using the online Pie Slicer application.

To download a copy of the case click here. Also, the case in the book has some mistakes. The case has been updated and will appear in future versions of Slicing Pie.

Slicing Pie at Campus Party in Colombia

One of my readers forwarded me a link to a video of Edward Ramirez presenting Slicing Pie in Spanish. Gracias!

How Much Equity Should I Give My First Employee?

This article was originally posted on Quora.com, but I liked it so I republished it here…

Don’t give him any equity. Just pay him a fair salary and keep the equity for yourself. However, if you can’t afford to pay him a salary you will have to give him equity. There is a way to figure out exactly how much you each deserve using the Slicing Pie method (aka Grunt Fund), here is how you would get started:

All employees, including you, shouldstart with no equity and earn it over time (I realize that at this point you probably own 100%, but here is how you give it away). Resist, at all costs, the temptation to keep a big chunk of equity for yourself. If you do, it will probably backfire and cause irreparable harm to your team dynamic. Founder’s do this all the time, but most companies fail and this (greedy founders) is one of the causes. Here is how to figure out what each person deserves:

Figure out opportunity costs for you and for the employee. This would be the amount of money you would be willing to accept for the same type of work if you were going to take a salary instead of equity. This is your fair market rate.
Subtract any cash payments from the company
Multiply the number times two (2). This recognizes the inherent risk associated with working for a startup company. It will also protect you from each other later down the road (more later).
Divide the number by 2,000. This is roughly the number of working hours in a year. This number is your hourly rate, expressed in “Slices“. It provides a relative measure of your respective contributions.
Track the hours you work.
Multiply hours worked times the slices per hour. This will tell you how many slices you have at any given time.

Your share is equal to the your number of slices divided by all the slices contributed by everybody. His share is equal to his number of slices divided by all the slices. The model is dynamic so it changes over time as more contributions are made. This makes sure it stays fair.

You can calculate slices for any input. Simply take it’s fair market value, subtract cash payments, then multiply by two for non-cash contributions (like time, royalties on ideas, commissions on sales, etc). For out-of-pocket costs and cash contributions you multiply by four because it’s harder to come up with cash than it is to come up with time (for most people).

If he quits or gets fired for cause he would lose his slices, this protects the company from decisions the employee makes that negatively impact the business.

If you fire him for no reason, or otherwise “push” him out,he keeps his slices. If you want them back you would have to buy him out at $1 per slice if you had the money. This protects the employee from decisions the company makes that have a negative impact on his future. The multiplier compensates him for his risk.

This is an oversimplification, I provide detailed instructions on how this work on my site: Equity Splits at Stanford University

I’ve also written a book on this topic, Slicing Pie, you can get a free sample on my site too.

Good luck!

Pitch Ninja Beta Version

I am happy to announce that I have completed the Beta version of Pitch Ninja: Persuasive Pitching and Presenting. This new book provides detailed instructions on how to deliver an engaging presentation on any topic. The book is based on the Super Awesome Presentation Zone Program, which divides the presentation space into three distinct zones including the Intimacy Zone, the Excitement Zone and the Information Zone. Each zone has a collection of corresponding non-verbal techniques that allow you to connect with your audience at a new level. The concepts are easy to understand and unlike any presentation book you have read before.

The Beta version is a pre-release version available in PDF format for anyone who would like to provide feedback. This means that it may still be a little rough around the edges and not quite ready for prime time. Individuals who provide meaningful feedback will be acknowledged in the book. There are a limited number of copies available so get yours today!

$3.00 – Buy Now! Checkout


Added to cart

 

You may wonder why I’m charging for the book instead of giving it away. This is part of my market test. If the content isn’t compelling enough to warrant a low price it probably won’t generate a regular price. This helps me determine how much time to spend on this particular project. If you want a copy, but don’t want to pay, please contact me and we can probably work something out!

Slicing Pie at SXSW

I need your help in the effort to spread the word about dynamic equity splits. I’m listed as a proposed speaker for the next South by Southwest (SXSW), but I need your vote to be accepted. The event is a music, technology and entrepreneurship conference and over 3,000 people applied to be speakers. So… I really, really, really need your vote to be accepted.

Will you please take a moment to visit http://panelpicker.sxsw.com/vote/38156 and cast your vote before September 5th? I would really appreciate it!

Dutch Translation of Slicing Pie

For those of you who are tired of reading Slicing Pie in English and don’t have time to learn Chinese, you can look forward to the upcoming Dutch version!

Excited to meet @Clogish & @yspeert and learn about the upcoming Dutch translation of the #SlicingPieBook @mikemoyer pic.twitter.com/ZkCn4rdO6p

— DutchBasecamp (@DutchBasecamp) August 29, 2014

Pie Slicer Update August 10, 2014

Thank you very much for your feedback on our Pie Slicer beta program. We have been reviewing feedback and making adjustments where practical. Some suggestions were great, but not practical/possible given the current structure of the program. Based on your feedback the following upgrades have been performed so far:

Support for HH:MM time format on time contributions
Immediate Update of contribution table and the summary without page reload.
Supports bulk contribution deletion
Dynamic height for contribution forms to support larger screens
Added “Reset Fund” feature under Pie Settings inside Settings tab
Opens up newly created fund after creation
Contributor well balance is included to his/her buyout price
By default, no alerts for new contributions and well updates.

And, the following bugs have been fixed:

Remove contributor: fixed bug on the calculation.
Fixed error on Delete contribution calculation
Pie leaders will not be able to delete themselves
Drawing well from funds: fixed calculation error

Special thanks to Maxine, Kartikeya, Danette, Guido, Detrick and Dennis for your great attention to detail and thoughtful feedback!

Slicing Pie in Amsterdam

The Slicing Pie model is taking off all over the world with startups who want to make their equity split fair. Entrepreneurs in local markets are helping others better understand how the model works in their location from a legal and tax standpoint.

For more information about the group in Amsterdam vising SlicingPie.nl 

Here is a Slicing Pie Meetup Group in London  (please add your email address to the UK list here: SlicingPie.co.uk)

Here is a link to the Chinese translation 

If you want to be the Slicing Pie go-to person in your country please let me know. I’ll help in any way I can!

Slicing Pie Available in Chinese

I’m happy to announce that Slicing Pie is now available in Chinese. It is available on Amazon.com and Amazon.cn. Other translations are in the works!

Pie Slicer Beta Test

We’ve been working hard to develop an online tool for tracking contributions from various Grunts. The new site will calculate pie and keep track of everything include cash investments using the “Well” structure as described in the book which converts cash to slices when it’s spent, not when it’s invested.

If you would like to become a beta tester for the software please complete the form below:

Name

Email