Saturday, December 22, 2012

Slicing Pie (Review)

I had the opportunity to review a copy of Mike Moyer's Slicing Pie: Funding Your Company Without Funds. Having worked at a number of startups at various stages,  I  was interesting in the insights this book gave into evaluating the value of and managing equity shares in an early company, before a company is making money, and before you have investors.

This seems like a book anyone involved in startups should read. Entrepreneurs can benefit from a reminder about the value of trust and fairness in dealing with those who join the company to help realize their vision. Those who join startups (even in later stages) can gain insight into the issues involved in bootstrapping a company. Anyone who works in small teams can gain insight into the psychology of motivation and compensation in team working to realize vision. This is a quick read, and the author uses frank, conversational language to explain the importance of fairness in dividing equity among founders.

The underlying concept is that, as an entrepreneur, you need to treat the people who join up early on to help you realize your vision fairly. This will sound obvious, but it's not a universal pattern. Part of the reason could be is that it's hard to know what "fair" is in the context of the uncertainty of a bootstrapping company. Value is uncertain and  people's commitment and enthusiasm can change over time. This book describes through how to define value and equity in a way that all the stakeholders can understand.

This book isn't just about philosophy, but presents a well defined process for managing equity in an early stage, unfunded company.  With case studies, examples, and online resources, this is a great book for someone looking to start a business, or someone thinking about getting involved in an early stage startup. For a short book it is very complete, covering not only the basic "equity" approach, but how the approach helps you to manage situations such as people joining and leaving the venture while still helping everyone to feel fairly treated.  This book is worth the time and the cover price for the information it contains. The book could benefit from some tighter editing, though overall the writing is concise and it's not hard to get past the few sections that are problematic. If you register the book on the author's web site you can get updates for free, so it's likely that my minor concerns about editing will be addressed promptly.

Overall this is a good book that provides actionable advice, for anyone looking to start a business, or join an early stage business.