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.
If you are about to start a business with someone go 50/50 if you don't feel confortable doing it then don't start the business anyway. Just like mariage it's a trust situation.
If you are about to bring someone into your existing business, the equity amount does not really matter because what you want to do is vesting, give the shares bits by bits after certain milestone that you predefine. You don't want to give 10% right away to someone who has done nothing and just slack on his/her shares.
Answered 6 years ago
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