Slicing pie is a method for founders to split the equity of their (future) business based on their direct contributions to the business. It is in the category of dynamic equity splits - which means that for a certain defined period of time the ownership stakes are dynamic (that is to say, changing). It was originally developed by Mike Moyer, a US serial entrepreneur, senior marketing executive and academic. The targets were early stage bootstrapped startups. The idea is that in the early stages the ideas, business plans and cofounding teams (!) go through so many changes and pivots that founders need an equity framework that will allow them to flexibly react to all of that. Why does it matter? Because for sustainable and performing cofounding teams it is necessary and desirable to remain fair to all cofounders when it comes to the reward (equity stake) for all their hard work. 

After promoting, researching and working directly and indirectly with the method for over 5 years, I would like to pitch for its very beneficial use beyond the main use case scenario. 

Having sought and listened to the feedback from many supporting (and many skeptical!) founders, I would be the first one to agree that one size does not fit all. Meaning slicing pie is not necessarily the golden bullet answer for all. 

However, I did find many very persuasive benefits with using this methodology going beyond the main initial use case. Here we go:

1. Retrofit: In the not at all uncommon scenario that you have multiple founders who contributed 

   a) for a different length of time; and / or

   b) different types of contributions (time, cash, IP…)

   ..and you would like to get a transparent starting point for the equity conversation (as one successful founder put it - it is a methodology that everyone can understand - which is already a great start!!)

2. Forecast: founders who want to use the fixed equity split (hopefully with some type of vesting schedule) but want to know what is fair and right given what they think the journey will look like and perhaps want optionally to use dynamic equity split as an adjustment clause (should the reality differ from their assumptions)

3. Angel / seed investment valuation: all of you who ever tried to ‘correctly’ value early stage pre-cash flow startups, probably know all about how ‘useful’ and ‘objective’ this exercise can be. A very attractive and interesting alternative to this is to simply add the early stage angel investors into the pie. The cash contributions are recorded alongside the other contributions - with the high multiple for cash contribution - to calculate the proportionate equity stake. There is a growing pool of angel investors who actually prefer and demand this alternative. 

Each of the use cases will have more detailed blog post to follow.