I’m always on the lookout for good tools for entrepreneurs. Frank Demmler from Carnegie Mellon has developed a simple model for allocating equity in a start-up company called the Founders’ Pie Calculator.
Frank’s concept is on the right track. It attempts to allocate equity based on the individual contributions from participants. It does not account for financial inputs, intellectual property, relationships, resources, etc. Also, founders have to plan different phases in advance, which seems kind of subjective.
Since I first came across this model in 2009 I’ve developed my own model which is much easier to implement. It’s called Slicing Pie. Click the book below for more information.
