slicing pie

Ownership Distribution

Time and money are weighted differently to reflect the market rate for labor and the scarcity of capital. A contributor who works without a salary earns equity based on the cash value of their hours, while an investor earns based on the amount of money provided.

Fairness Objective

Risk determines the reward by ensuring that those who provide substantial contributions early on are not unfairly diluted by later arrivals. This method prevents the conflict that often arises from a fixed equity split where one person does most of the work but owns an equal share. The calculation remains transparent so that every participant knows their current stake at any given moment.

This transparency reduces the likelihood of legal disputes during a transition.

Exit Calculation

Final stakes solidify only when the company reaches a liquidity event or starts making enough profit to pay market salaries. At that point, the dynamic portion of the model stops and the ownership percentages become fixed for the long term.