Sketch 3 is my leading proposal
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Sketch 1
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Sketch 2
Sketch 3
- 10% to Manifold for incubating and backing 2023, 2024
- 10% to Manifund for backing (not investing) 2025 with $100k, plus incubating
- 40%: 10% each year to individual organizers, for 4 years
- 2023: 5% Austin, 3% Saul, 2% David
- 2024: 4% Saul, 4% Rachel, 2% Austin
- 2025
- 2026
- 40% unassigned
- 20%: for some other future fulltime team, vesting over 4 more years?
- 20%: future events?
Thoughts:
- Equal-ish splits of 10% each Manifold, Manifund, and each year’s organizers seems pretty okay
- (though this is sus, on priors you should expect contributions from different parties to be pretty unequal?)
- Also means that ~10% equity translates to about 6mo of FTE work (3FTE x 2mo)
- vs Manifold, for one founder: ~3.3% equity for 6mo (1 FTE x 6mo)
- Would also mean a fulltime CEO of Manifest might get eg 30% vesting over 3 years, starting from now?
- On one hand, fulltime work & comm more valuable than part time
- On the other, Manifest is starting with a lot more brand value
- Also puts valuation of “Manifest” at $1m, which seems a bit low maybe. But maybe Manifund gets a better deal for being early and contributing a bunch of its opportunity cost too
- Actually, “Manifest” at $1m for the ~50% vested piece seems maybe reasonable? Earlier Austin thought $200k-$2m was a reasonable guess for The Curve
- (though, The Curve is also only like 25% vested, under some considerations)
- At a $1m valuation, 1% = $10k in “equity”. which is… fine?
Misc notes
- A lot of this is about relative weights:
- What is the relative contribution of “organizer (time) vs funder (money) vs brand (connections)”?
- Between organizers, what is the relative contribution?
- I think this is much easier to think about, maybe because one rough heuristic is “how much time is each person contributing”, and then you adjust for seniority
- How to structure this as a proper “impact cert”, not just a standard for-profit?
- Could accept philanthropic funding
- Could write into corporate charter, or make it similar to a public benefit corporation
- What does it mean for someone to own 10% of “Manifest LLC”?
- Has 10% of ownership interest, typically characterized as “financial interest”?
- Makes most sense if this thing is ever sold
- Holds 10% of “impact”?
- in some kind of retroactive credit sense?? What does this mean?
- What is the literature on equity splits eg for startup founders?
- The 4 year comparison is copied from standard 4 year vesting for founders
- https://blog.samaltman.com/employee-equity
- https://paulgraham.com/equity.html
- Also, what’s literature on bootstrapped events businesses? Might be a better reference class than tech startups
- (though: the opportunity cost of folks does come more from tech startup backgrounds)
- Also weirder since this isn’t FTE work
- How does future “dilution” work?
- Like, assume that a startup has hit its 4 years. How are founders compensated now?
- Is it bad that this only outlines like a 4 year roadmap for “Manifest”, of which 2 years have already elapsed?
- Are we double-counting assignments?
- ie in 2023, Austin/Saul/David were all working for Manifold, and got Manifold equity for their work there already.
- Maybe this is fine though
- Does it make sense to think through Shapely values here?
- Austin argues valuations should not include unvested equity
- I think Claude agrees fwiw
- Taxes seem like they’d be a headache to manage? Weird setups for founder equity in c-corps anyways, to avoid taxable events
- Maybe instead of LLC, this should be c-corp, idk
Ownership vs decisionmaking
- So far this is more set up for economic interests
- But there’s a broader question of governance, how “Manifest LLC” actually makes decisions
- Shareholder vote?
- Early startup or charity: “CEO makes calls, board can fire the CEO?”
Alternative structure: “Manifest Umbrella”
- “Manifest LLC” is a wholly owned subsidiary of “Manifest Umbrella”, which has the for-profit plus “good for the Manifold community/good for the world” structure
- “Manifest Umbrella” doesn’t even need to be incorporated?
- Manifest Umbrella
- Manifest LLC
- Manifest Charity (501c3)?
- (or also unincorporated; c3 is mostly good for receiving grants)
- Represents something interesting about positive externalities
- Manifest LLC tries hard to make money
- Manifest for Charity wins grants for positive externalities (eg takes an OpenPhil grant, or a large supporter donation)
- But: more complicated, so probably bad.