3 ms·

Give your company (and currently done work) a valuation. Say $100000. Assign yourself 100 shares from the company. Each share is now valued at $1000. Now a new

Give your company (and currently done work) a valuation. Say $100000. Assign yourself 100 shares from the company. Each share is now valued at $1000. Now a new-comer brings a certain value.. say $20000. Hence give the newcomer 20 shares. The variables are essentially, current value of the work, and the value that the new partner would bring.

darrenshrwd 10y ago
Ok, that makes sense so the issue may be to agree on the value of the platform before it really has traction. I know the quality of my work is high but that many others have failed to compete with the major well funded players in this space. I guess the value has to be based mostly on potential revenue at such an early stage. So if there are three well establish direct competitors (in Australia) would I look at what percentage COULD be gained and the value of one of those competitors?
- anilgulecha 10y ago
  Value is really something you have to think about right. Value it too high, and the person may not think it worth their while for the piece they get, value it low and you feel cheated. A good proxy would be : how much in salary would it take a good engineer with some product know-how to build what you've built.
  - darrenshrwd 10y ago
    That proxy is probably the only one that makes sense at this early stage, effectively it could be worth absolutely nothing or millions in x years.
darrenshrwd 10y ago
So going with your sample of $100,000. 1. I have 100 shares 2. Newcomer does $4000 worth of work and therefore gets 4 shares. Meanwhile I have done another $6000 worth of work so I get 6 shares, there are now 106 shares in the company and the company is worth $110,000 (until it can be properly valued based on other metrics). Just writing this out for myself really, I realise shares issued don't have to be divisible by 100.

3 ms·

Give your company (and currently done work) a valuation. Say $100000. Assign yourself 100 shares from the company. Each share is now valued at $1000. Now a new

by anilgulecha 10y ago

darrenshrwd 10y ago
Ok, that makes sense so the issue may be to agree on the value of the platform before it really has traction. I know the quality of my work is high but that many others have failed to compete with the major well funded players in this space. I guess the value has to be based mostly on potential revenue at such an early stage. So if there are three well establish direct competitors (in Australia) would I look at what percentage COULD be gained and the value of one of those competitors?
- anilgulecha 10y ago
  Value is really something you have to think about right. Value it too high, and the person may not think it worth their while for the piece they get, value it low and you feel cheated. A good proxy would be : how much in salary would it take a good engineer with some product know-how to build what you've built.
  - darrenshrwd 10y ago
    That proxy is probably the only one that makes sense at this early stage, effectively it could be worth absolutely nothing or millions in x years.
darrenshrwd 10y ago
So going with your sample of $100,000. 1. I have 100 shares 2. Newcomer does $4000 worth of work and therefore gets 4 shares. Meanwhile I have done another $6000 worth of work so I get 6 shares, there are now 106 shares in the company and the company is worth $110,000 (until it can be properly valued based on other metrics). Just writing this out for myself really, I realise shares issued don't have to be divisible by 100.