E196: Mike Moyer's Slicing Pie: A Fair and Logical Approach to Equity Distribution - Watch Here

About the Guest(s):

Mike Moyer is an entrepreneur, author, and award-winning speaker. He is the author of "Slicing Pie" and "Will Work for Pie," among other books. With a background in startups and a wide range of business experiences, Mike has developed a deep understanding of equity splits and fair dealing with partners. He is passionate about helping entrepreneurs navigate the challenges of equity distribution and has become a leading expert in the field. You can find more information about Mike Moyer on his website.

Episode Summary:

In this episode, Ronald Skelton interviews Mike Moyer, the author of "Slicing Pie," a groundbreaking book that offers a fair and logical approach to equity splits in startups. Mike shares his origin story as an entrepreneur and explains how his personal experiences with unfair equity splits led him to develop the Slicing Pie model. He breaks down the concept of Slicing Pie and highlights its key differences from traditional equity distribution methods. Mike emphasizes the importance of basing equity splits on the bets made by each individual, whether in the form of time, money, or other contributions. He also discusses the challenges of implementing Slicing Pie after a company is already up and running and provides insights on how to navigate equity splits in mergers and acquisitions. Throughout the conversation, Mike emphasizes the universal logic and fairness of the Slicing Pie model and its potential to revolutionize the way startups approach equity distribution.

Key Takeaways:

• The Slicing Pie model offers a fair and logical approach to equity splits in startups, based on the bets made by each individual.
• Equity splits should reflect the proportionate contributions of each team member, whether in the form of time, money, or other resources.
• Slicing Pie provides a dynamic framework that adjusts as the company grows and changes, ensuring ongoing fairness in equity distribution.
• Implementing Slicing Pie after the fact is possible through a process called retrofitting, which involves recalculating equity splits based on past contributions.
• The Slicing Pie model can be used in mergers and acquisitions by combining the pies of the merging companies and ensuring a fair distribution of equity.

Notable Quotes:

• "Fairness is a universal concept. Just like splitting a cookie with your brother, equity splits should be based on the bets made by each individual." - Mike Moyer
• "Slicing Pie is a financing tool that ensures fairness in equity splits. It works because it is based on observable facts, not subjective opinions." - Mike Moyer

Article: 

Slicing Pie: A Fair and Equitable Model for Startup Equity Distribution

Key Takeaways:

• Slicing Pie is a revolutionary model for splitting equity in startups that is based on a fair and logical foundation.
• The model is based on the concept of fairness, where equity splits are determined by the value of each individual's contributions to the company.
• Slicing Pie provides a transparent and dynamic framework that ensures equity distribution aligns with the actual bets made by each team member.

Introduction

In the world of startups, one of the most challenging aspects is determining how to fairly distribute equity among team members. Traditional methods of equity distribution often lead to disputes and resentment, as they rely on subjective assessments and predictions of future value. However, there is a better way. Enter Slicing Pie, a groundbreaking model for splitting equity that is based on a universal foundation of logic and fairness.

The Slicing Pie Model: A Universal Foundation of Logic

The Slicing Pie model is based on a simple analogy: a game of blackjack. Just as in blackjack, where the winnings are divided based on the bets made, Slicing Pie determines equity splits based on the actual contributions made by each team member. The model recognizes that the future is uncertain and that the only thing certain is the value of the bets made.

According to Mike Moyer, the creator of the Slicing Pie model, "It's only logical that the equity split should reflect the respective bets made by each individual." The model uses multipliers to account for the different values of cash and non-cash contributions, ensuring a fair distribution of equity.

Implementing Slicing Pie: A Solution to Equity Split Issues

One of the common challenges faced by startups is the need to revisit equity splits when they realize that the initial arrangement is not working. The Slicing Pie model provides a solution to this problem through a process called retrofitting. By recreating the past and determining the equity splits based on the actual bets made, the model ensures a fair distribution of equity moving forward.

Mike Moyer emphasizes the importance of implementing the Slicing Pie model, especially in situations where family members or couples are involved in the business. He states, "Do the slicing pie. I know you're feeling generous, you don't want to use your brother, you know, nickel and dime, but get it in place because that way you'll stay friends." By using the Slicing Pie model, startups can avoid conflicts and maintain healthy relationships among team members.

The Benefits of Slicing Pie: Transparency and Fairness

One of the key benefits of the Slicing Pie model is its transparency. With the use of software tools, team members can easily track their contributions and see how their equity is being allocated. This transparency fosters trust and ensures that everyone is aware of the value they are bringing to the table.

Furthermore, the Slicing Pie model promotes fairness by aligning equity splits with the actual bets made by each team member. This eliminates the need for subjective assessments and predictions of future value, which often lead to disputes and resentment. Instead, equity distribution is based on quantifiable contributions, ensuring that each individual receives their fair share.

Ronald Skelton acknowledges the potential impact of the Slicing Pie model on relationships, stating, "I think you're going to save a lot of relationships out there. You probably even save some marriages if you get married couples that are going to business together." By providing a fair and logical approach to equity distribution, the Slicing Pie model has the potential to revolutionize the way startups split the pie.

Conclusion

The Slicing Pie model provides a fair and equitable solution to the complex issue of startup equity distribution. By basing equity splits on the actual bets made by each team member, the model ensures transparency, fairness, and collaboration. Whether you are starting a new venture or looking to revise your current equity structure, implementing the Slicing Pie model can help you avoid disputes and create a foundation for long-term success.

So, why settle for anything less than a fair and logical approach to equity distribution? Embrace the Slicing Pie model and revolutionize the way you split the pie in your startup. As Mike Moyer aptly puts it, "It's hard. People don't usually call authors of their books and tell them what happened." If you have used the Slicing Pie model and it has made a difference in your business or personal life, reach out and share your success story. Authors like Mike Moyer appreciate hearing how their work has positively impacted others.

To learn more about the Slicing Pie model and access additional resources, visit MikeMoyer.com and SlicingPie.com. Start implementing a fair and transparent equity distribution system today and pave the way for a successful and harmonious startup journey.

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