When you’re starting a new scrappy business, one of the best ways to track equity/effort is to assign it based on effort and money spent rather than dividing it up 50/50 or something like that.
To that end I’ve recommended SlicingPie.com for years.
This week I didn’t want to pay $20 just to simulate a potential app. So I spent a few hours and made a spreadsheet that does the same thing! These are the defaults, taken from Pie Slicer:
- You set a market rate for each founder, so time spent is multiplied at 2x
- Cash is valued at 4x (it’s more risky early!)
- 10% sales commission
- 5% investor finder’s fee
Here’s a sample initial input that I used to test it out for an app we’re working on. The incentive is to get the business to where it’s making money and people are paid, thereby freezing the pie at whatever it’s at and assigning that out as equity.
If you’re interested in trying this out let me know!