Thursday, November 16, 2006

Friend Keeper / Equity Calculator

This is an excel sheet posted to google spreadsheets
It is my proposed framework for handling equity distributions in startups
I don't know yet if it is consistent w/rules for all corporate structures - LLC, S-Type etc.

I created this to solve a few problems:
Not everybody's hourly input is of equal value
Not everybody works as many hours
People/friends realize that they can't work together, but this shouldn't preclude them from getting something for their efforts so that they can quit w/o getting screwed
"Shares" and "Options" are generally totally misunderstood and wildly over or under appreciated (either is bad) by those who are granted them
Determining who gets what upfront is basically impossible
"Owner/Founder" is kept in check using my suggested rules