HOW IT WORKS

the GOAL

Alignment. Our goal is to create a program where the investor’s and founder’s interests are totally aligned.

Founder Forward. Our goal is to ensure that incentives are build for the founder without creative punitive consequences in the future.

We do this by creating a true partnership with the founder, initially there's a 50/50 split of the company. Instead of creating a bunch of new ways to measure and monitor the business, we simply allow the founder to buy back a majority our equity at a known price at any time after the first year.

Our initial expectations are that a majority of our equity will be re-purchased for 5x the amount that we invest and we will retain 5% of the company. However, to incentivize the founder to buy back the equity earlier, between year one and two the majority of our equity can be bought back for 2x the initial investment and we retain 2% of the company, between year two and three it's 3x the initial investment and we retain 3% of the company, between year three and four it's 4x the initial investment and we retain 4% of the company, and then anytime after it's 5x and we retain 5% of the company. At the beginning of year five, we do suggest that the founders start to consistently buy back the equity up to at least 1x are our initial investment.

It's important to keep in mind since the price of our equity is known up front that portion of the company will never be valued at anything more than that price. So any additional value the founder creates in the company will all go to them. Founders put in the work and gain the reward.

Since everyone's interests are aligned, we all have the same goal: Increase high margin revenue so that the company has an opportunity to buy back the equity.

If we invest $300,000, this is how the buyback would work. You can also try it out for yourself here.