How Does Entrepreneur Mike Moyer Suggest to Split up the Startup Among Founders?

How Does Entrepreneur Mike Moyer Suggest to Split up the Startup Among Founders?

When starting a business, one of the most critical decisions entrepreneurs must make is how to divide equity among the founding team. Mike Moyer, an experienced entrepreneur and author of the book “Slicing Pie,” offers a unique approach to this challenge. Rather than relying on fixed percentages or guesswork, Moyer suggests using a dynamic equity split that adjusts over time based on each founder’s contributions. Here is an overview of Moyer’s methodology and nine frequently asked questions about his approach.

1. What is the Slicing Pie model?
The Slicing Pie model is a framework for splitting equity that considers the value of each founder’s time, money, ideas, and other contributions to the startup. It calculates a “grunts” share based on these inputs.

2. How does it work?
Moyer’s model involves tracking each founder’s contributions and assigning a “grunt” value to them. This value is then used to determine the percentage of equity each founder receives.

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3. Why is it called Slicing Pie?
The term “Slicing Pie” refers to the idea that equity is divided like a pie, where each slice represents the value of a founder’s contributions.

4. Does the Slicing Pie model account for cash investments?
Yes, the model considers cash investments made by founders. It assigns a value to these investments and factors them into the equity split.

5. What happens if a founder leaves the company?
If a founder leaves the company, the Slicing Pie model allows for their equity to be reallocated to the remaining team members based on their ongoing contributions.

6. Can the Slicing Pie model be used for startups at any stage?
Yes, the model is designed to be used at any stage of a startup, from the initial idea to growth and beyond.

7. How does the Slicing Pie model prevent disputes?
By basing the equity split on quantifiable contributions, the Slicing Pie model minimizes the potential for disagreements among founders. It provides a fair and transparent framework for distributing equity.

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8. Can the Slicing Pie model be used for remote teams?
Yes, the model is applicable to remote teams as well. Contributions can be tracked using various tools, such as time-tracking software or project management platforms.

9. Are there any drawbacks to using the Slicing Pie model?
One potential drawback is that the model requires ongoing tracking and adjustment of equity, which can be time-consuming. Additionally, it may not be suitable for startups with a more traditional structure or those seeking external funding.

In conclusion, Mike Moyer’s Slicing Pie model offers a dynamic and fair approach to splitting equity among founders. By considering each individual’s contributions, the model ensures that the equity split accurately reflects their value to the startup. While it may not be suitable for every situation, it provides a valuable alternative to more traditional methods of dividing equity.

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