Questions

How do you determine new partner equity in a pre-existing business? I've read the book Slicing Pie and it explains a lot of it detail. My confusion is how to actually determine what a potential partner's contribution is valued at to figure out what that brings to table.

Hi, great question.

You determine the value of the business before the partner joins, then you determine the value of what they bring.

You then issue new shares to them.

I made this video which may clear things up a bit for you.
https://youtu.be/1EjKjSAd1F8

And this one about share dilution:
https://youtu.be/FtogXYXCC1s

If you want to discuss your specific circumstances, please feel free to request a call.

David
www.DavidCBarnett.com


Answered 2 years ago

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