Commercial in Confidence. © 2014 Saasu Pty Ltd. All Rights Reserved. 19th March 2014 BY Marc Lehmann CEO, Saasu [email protected] @saasu @marclehmann CEO INSIGHTS Equity Splitting
Equity Splitting for Startups
Aug 26, 2014
Many businesses only address equity splits when it's too late. This ends up becoming a financial and emotional drain on the business and the people in it.
This presentation addresses the following actionable results:
+ How to identify the fair way to split your business.
+ How to prevent future financial and legal disagreements.
+ Ways to maintain strong relationships between all the owners.
The video version is here:
http://vimeo.com/90274780
Disclaimer: This is not financial advice. It is general and educational. I have not given any consideration to your specific industry, business model or financial circumstance.
This presentation addresses the following actionable results:
+ How to identify the fair way to split your business.
+ How to prevent future financial and legal disagreements.
+ Ways to maintain strong relationships between all the owners.
The video version is here:
http://vimeo.com/90274780
Disclaimer: This is not financial advice. It is general and educational. I have not given any consideration to your specific industry, business model or financial circumstance.
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Transcript
Commercial in Confidence. © 2014 Saasu Pty Ltd. All Rights Reserved.
!19th March 2014 !BY Marc Lehmann CEO, Saasu [email protected] @saasu @marclehmann
CEO INSIGHTS
Equity Splitting
About me
Disclaimer
General and Educational. !
These are take away ideas only, not advice. Your financial planner & accountant are your
advisors for your specific circumstances.
Methodology
This is just one of many methods. Different businesses suit different models.
!This is to help you clear blind-spots, seed ideas & inspire.
It also serves to break what is often a back of napkin approach by entrepreneurs at the critical start point.
What’s the experience of equity splitting?
Unfair
Incomplete
Unstructured
Legal paperwork
Changed contributions
Unaccounted contributions
Default elements in equity splitting?
IDEAS
💡
CASH
💵TIME⏲
Business equity is often split on a napkin !!!
Where do we start? A: Logic, then some maths
Value execution and focus skills
The officer at risk
Present value your future time and cash flows
Foregone salary opportunity cost
Benchmark your ideas to competitors IP value
Relationship & health pre-conditions
Personal brand wash applied to the business
Agree probability of cashflows
Value experience and youth
Starting point
CAPITAL💵
IDEAS💡
BRAND$
RISK⚠
COSTS&
Step 1: Break each component down
Step 2: Total of all the components
Step 3: Split the equity
CAPITAL💵
Equity Splitting Smarties Guide by Marc Lehmann
Initial capital
PersonalGuarantees
💵
☂
Future capital
- Opportunitycosts
Initial time invested⏲
BRAND$
RISK⚠
COSTS&
📰 Well known board members
Ideas Generated
© IntellectualProperty
🎯 Strategic Plans
*
+
✒
-
Founder Brand Wash
Pre-existing Visual Identity
Contact Networks
💍Relationship Complexity
🚪Doors already Opened
0
💰
🏦
⌖
4
Bank/debt Guarantee
Director
Liquidity Provider
CompanySecretary
PublicOfficer
Assets transfers
Freeresources
Vehicle usage
Office setup
🚘
Devices
Travel
📒 🏢
⚛
9
✈
DigitalAssets🔗
Company Formation<
Top 10 Tips 1. Value execution and focus skills. 2. Riskier roles are worth more equity. 3. Present value your cash valuations. 4. Foregone salary is an opportunity cost. 5. Model probability of valuation items. 6. Benchmark value IP/Ideas to competitors. 7. Any investor relationship or health issues? 8. Strong personal brands add value. 9. Future cash flow has risk, allow and agree on it. 10.Experience doesn’t always trump the value of youth.
=
>Mentors & advisors
Saasu Pty Limited ACN 093 453 886 http://creativecommons.org/licenses/by/4.0/
80% 20%Capital
IP
Brand
Risk
Costs
50
150
150
200
100
75
275
?
PPPatents pending
TMTrade marks
IDEAS💡
VALUE & SUM COMPONENTS (provided by each founder)
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