Have you looked at http://www.fairsoftware.net/
On Oct 12, 9:43 am, "Sjors Provoost" <[EMAIL PROTECTED]> wrote: > Gday, > > First of all I should tell you I'm a physicist, not a lawyer / > economist. But that doesn't stop me from throwing this idea at you > guys. > > I had a fantastic time at startupcamp in Melbourne last weekend and it > was the first time I was confronted with the whole equity thing. I've > also read a bit of the discussion on this list about the subject. > > I've heard there are a number of the problems with splitting the > "company" equally over all group members: > > 1 - it creates friction when - after the weekend - some people want to > put more time in it then others > 2 - it creates even more friction when serious money is about to be > pored into the project > 3 - investors don't like having to deal with too many people > 4 - any serious decision making is hard to do if only a small part of > the group remains highly active, especially when money is involved > > So here's my proposal: tell everyone to "bill" their hours to the > "company" at a fixed hourly rate. > > Now we introduce a couple of rules: > 1 - voting rights are weighted according to these amounts > 2 - you are obliged to sell your share to the company for no more than > these billed hours, the same goes for partial shares > 3 - a majority (ownership-wise) can decide to "hire" new people under > the same rules > > An example: > A group of 7 bills themselves at $100 / hour. The startupcamp counts > as 30 hours, so everyone starts out with $3000 and the total company > is "worth" $21.000. Alice is really the only one who cares about this > idea and spends the next month working full time on it while the rest > is watching footy. Her 160 extra hours, plus the original $3000 put > her share at $19.000. The others own $18.000, which means Alica now > owns more than 50% of the company. She then heads off to the nearest > VC, obtains half a million dollars and buys out the other 6 people at > $3000 each. > (After that the VC might buy her out as well of course, like Obi One > Kanobi(?) said: "there's always a bigger fish") > > But here's the *really* interesting part: investors should be invited > to the ideation phase of startupcamp. They can then offer a stipend to > the group, in exchange for a share in the company. For example: > > Investor Bob really likes the groups third idea and is willing to pay > each of the participants a stipend of $500 dollars for the weekend for > executing it. In exchange he wants a $1500 share per person in the > company, under the same rules. Using the numbers from the previous > example, the group members now own $2500 each, so the investor now > owns $1500 / ($1500 +$2500) * 100% = 37% of the company. > > Worst case outcome: the group leaves the weekend with $500 in cash, a > nice portfolio project and a lot of new stuff learned. > > Medium case outcome: the group gets bought out of their own company > and leaves the weekend with $3000 cash (and probably a job). > > Best case outcome: the group ends up with a very successful company > and buys out the investor. > > And there's no reason to stick with one investor. I would like to see > the place crowded with hungry financial consultants offering bids > during this intense one hour phase where companies decide on their > product... > > With a bit of (p)luck, people could actually make a living out of > jump-starting new companies. > > Open questions: > > * how to set the hourly rate: too much and they cripple their own > company and become unattractive to investors. Too little and they are > giving their company away to a random guy on the street. The rate > should probably take into account the risk factor. > > * Borrowing money (and other liabilities). I suggest that if the > company borrows money, only the people who approved of the transaction > are responsible. I.e. if the company goes bankrupt, you can't get the > money from your passive team mates. > > * How do you prevent the majority from buying *themselves* out with > company money and not taking care of the minority? > > * Who can turn this into a legal document, preferably immune to the > investors army of lawyers? > > I'd love to hear your thoughts about this. > > Cheers, > > Sjors --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Silicon Beach Australia" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en -~----------~----~----~----~------~----~------~--~---
