David Hodgson from Humingbird Labs had lunch with Citizen Code co-founder Noah Thorp, found out about the concept of ‘Grunt Funds of and then posted this very interesting article over at Bloomberg BusinessWeek about ‘Grunt Funds’ or ‘dynamic equity splits’ on the Next Edge facebook group
very applicable to the kinds of things we are thinking about – how to value dynamic contributions to entities in an equitable way
I read the article and Grunt Fund/ dymanic equity splits sound pretty much exactly the same as what Bettermeans called ‘contribution-based rewards’ and Sensorica and Mikorizal‘s work on Open Value Networks.
Here is how the article describes the idea:
dynamic equity splits, an idea making the rounds among Chicago startups. The concept is described in a book called Slicing Pie, by Mike Moyer, an adjunct professor of entrepreneurship at Northwestern University and founder of venture capital firm Lake Shark Ventures. Basically, Moyer’s idea assigns monetary value to every tangible and intangible contribution individuals make to a startup, from intellectual property and relationships to time and cash. Each founder keeps track of his or her hours, accumulating equity in a “grunt fund,” based on a formula that assigns a weight to each contribution that person makes.
Read the full article here