Introduction
This document establishes the terms under which contributors, including team members and project-specific personnel, will be compensated for their contributions to [Company Name] ("the Company"). It integrates both equitable equity distribution via the Slicing Pie model and cash compensation for project work, ensuring a comprehensive, fair, and adaptive compensation system.
Objective
To create a transparent, fair, and motivating system that rewards both the long-term commitment and short-term efforts of contributors through equity and cash, reflecting true value added to the Company.
Equity Compensation using the Slicing Pie Model
Equity Pool Allocation
- Founder’s Share: A 51% ownership stake is retained by the Founder, acknowledging the initial concept, capital input, and foundational efforts.
- Dynamic Equity Pool: 49% of equity is set aside for team contributors based on the Slicing Pie model, ensuring contributions are equitably rewarded.
Implementation
- Contribution Tracking: Contributions including time, money, resources, and intellectual property are weekly tracked and valued at their fair market value.
- Slices Calculation: Contributions are converted into "slices," with multipliers reflecting their risk/value:
- Cash and equivalents: [2x] multiplier
- Time contributions: [1x] multiplier
- Equity Allocation: Contributor shares of the Dynamic Equity Pool are dynamic, adjusting with contributions.
Examples of Equity Compensation Contributions
- Business Development & Sales Initiatives: Strategy formulation, lead generation, customer relationship management, and closure of sales deals.
- Marketing & Public Relations Efforts: Brand promotion, digital marketing campaigns, public relations activities, and engagement analytics.
- Content Creation & Management: Authoring of articles, blog posts, whitepapers, and management of multimedia content across platforms.
- Community Engagement & Development: Building and nurturing the community, facilitating discussions, and organizing events or webinars.
- Process Optimization & Management: Streamlining operational processes, implementing efficiency tools, and overseeing project management activities.
- Product Development & Innovation: Innovative solution design, software development, system architecture planning, and product lifecycle management.
- Knowledge Base Contribution & Curation: Accumulating, organizing, and updating the knowledge repository, including technical documentation and best practices.
- Technical Support & Consultation: Providing technical assistance, troubleshooting, and consulting services to internal teams or customers.
- Strategic Planning & Implementation: Development and execution of business strategies, market analysis, and competitive positioning.
- Training & Educational Program Development: Designing and delivering educational programs, workshops, and training sessions on relevant subjects.
Vesting and Conversion
- Vesting Schedule: A standard three-year vesting with a one-year cliff is applied to equity allocations.
- Conversion Event: Equity allocation solidifies upon specific events like funding, acquisition, or revenue milestones.
Provisions for New and Future Contributors
- Open to new contributors at any stage, ensuring fairness and adaptability.
Cash Compensation for Project Work
Compensation Structure
- Flat Rate Compensation: Contributors receive a flat hourly rate for project work, reviewed annually or as market conditions dictate.
- Revenue Share: A [40%] commission on gross compensation supports the Company's sustainability, with [60%] retained by the contributor.
Implementation and Transparency
- Agreement on Work: Clear documentation of project scope and compensation precedes project work.
- Tracking and Reporting: Utilization of tools for accurate work hour tracking and visibility.
- Monthly Settlement: Detailed compensation statements are issued, showing work hours, compensation, and deductions.
Legal and Financial Considerations
- Maintaining meticulous records for contributions and compensations, and ensuring all legal and enforceability aspects are addressed with appropriate legal guidance.
Dispute Resolution
- Establishing processes to resolve any disagreements regarding contributions, valuations, or compensation.
Adaptive Review and Adjustments
To ensure the compensation framework remains aligned with our dynamic business environment and team contributions, the Company commits to a regular, adaptive review process of this agreement. Initially, reviews will take place monthly, transitioning to quarterly reviews as the Company stabilizes, and eventually moving to annual reviews. Changes to the agreement will be considered in response to the evolving needs of the business and its contributors, requiring consensus for amendments, which will be documented accordingly. This phased approach guarantees our terms stay relevant, fair, and supportive of mutual growth.
Conclusion
This Contributors Agreement signifies [Company Name]'s commitment to a fair, transparent, and dynamic approach in rewarding the contributions of its team members. By adopting this integrated model, the Company fosters a culture of fairness, motivation, and shared success, balancing immediate financial incentives with long-term equity growth.
This document forms the basis of our collaborative relationship, ensuring that every contribution, big or small, is acknowledged and rewarded in line with the Company's goals and values.