How We Cut Our Pie: Dividing Shares Of A Startup With Earlybird Investors.
Dividing shares. This is the topic we’ve waited the longest to tackle. We weren’t sure how to deal with it. We wish there was a tool that we can just plug in all the time and money gone into the project, including the start date to calculate the value of the project and all the shares and stuff and stuff and stuff.
Anyways, what we’ll do is find the total amount of time and money gone into the company and find the percentage of each member’s contribution to the total; that’ll equal a member’s share. Thankfully we’re still in our early stages, so it won’t be that difficult to go back to receipts of everything we paid for. Everything is mostly Early bird investing which means the first members to spend and work on a concept. I suggest the ones who haven’t started their project yet, to RECORD the TIME and MONEY that has been spent over the project. Get an accounting firm to certify the early bird investing, so that all that time and money can translate into shares, which will be equivalent to 5X times its initial value when spent before registration or before your first prototype is made! Not bad.
Here’s a great article by Chron.com. They explain the share dividing process in 3 steps including how to distribute profits and losses.
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