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7 Comments

Ownership structure

Hello folks! I have been working alone on my project for 1 year and a half and now I'm preparing to onboard new people. The project is not yet profitable, so we are looking into shared ownership. Which sort of models and structures have you used for that? How do you define %s? Do you have any specific recommended reading on this topic?

PS: There is no legal entity yet. I have been operating it as a sole trader. I'm currently based in the UK, but will move to Spain soon.

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      I had not, thank you, this sounds really useful! I'm not sure how do I calculate my contributions retroactively right now using this proposal, but maybe the book will have an answer for that!

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        I don't know if this book covers it but I'd also recommend that people don't just start and get 5% on day 1.

        On day 1 they have nothing and they can work towards their share over the course of maybe 24 months.

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          Thanks! Yea, I was already thinking of a process like this :)

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            This is called a vesting schedule. The typical structure is 4 years vesting with a 1-year cliff.

            https://blog.ycombinator.com/understanding-startup-stock-options-berbix

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              Im aware what a vesting schedule is, after having worked in multiple startups, thanks. My main concern ahd what I am finding most difficult is identifying peoples contributions and matching a number to that...

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        I believe in the slicing pie formula, the calculated ownership values are cumulative (i.e. they should reflect all contributions past and present).

        If you feel like the retroactive contributions are not accurately reflected in the current ownership split, you can always "true-up" the ownership numbers.

        You can follow the formula as the book is laid out, or just do your own calculations based on the principles. Or you can just do whatever you want as long as everyone's happy :)

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