Contribution Equity Split

Allocate equity by explicitly weighted cash and valued labor contributions.

Description

Contribution-based equity scenarios can value both cash and labor.

Contribution-based equity scenarios can value both cash and labor. Explicit risk multipliers determine their relative contribution units.

Allocate equity by explicitly weighted cash and valued labor contributions.

When to use Contribution Equity Split

Use this for the following task: Allocate equity by explicitly weighted cash and valued labor contributions.

Prepare the scenario values in one currency and consistent time periods. Use fractions for fraction fields and percentage points for percent fields.

How to use Contribution Equity Split and understand its results

Prepare the scenario values in one currency and consistent time periods. Use fractions for fraction fields and percentage points for percent fields.
Enter contributors, cashContributions, laborHours, hourlyValues, cashRiskMultiplier, laborRiskMultiplier using the field table, then run the tool.
Read contributionUnits, equityPercent. Interpret flags, units, ordering and placeholder values using the rules below.
Review any reported issue or failed check, correct the supplied values when appropriate, and verify the result in its intended context.

Input field	Meaning	Value type and bounds	Requirement
contributors	Contributors	list of string; each entry: string	Required
cashContributions	Cash contributions	list of number; each entry: number	Required
laborHours	Labor hours	list of number; each entry: number	Required
hourlyValues	Hourly values	list of number; each entry: number	Required
cashRiskMultiplier	Cash risk multiplier	number	Required
laborRiskMultiplier	Labor risk multiplier	number	Required

Align contributors and nonnegative cash/hours/hourly values, requiring positive multipliers and total units. Normalize the computed units into percentages.^[1]

units=cash×cashMultiplier+hours×hourlyValue×laborMultiplier; equity%=100 units/Σunits

This summarizes the declared operation. Units, indexing, inclusivity and exceptional cases are explained in the surrounding text.

Output field	Meaning	Value type
contributionUnits	Contribution units	list of number
equityPercent	Equity percent	list of number

json

{
  "input": {
    "contributors": [
      "A",
      "B"
    ],
    "cashContributions": [
      100,
      0
    ],
    "laborHours": [
      0,
      10
    ],
    "hourlyValues": [
      20,
      20
    ],
    "cashRiskMultiplier": 2,
    "laborRiskMultiplier": 1
  },
  "output": {
    "contributionUnits": [
      200,
      200
    ],
    "equityPercent": [
      50,
      50
    ]
  }
}

Limitations and assumptions

Valuations and multipliers are caller choices. This does not create legal ownership, apply vesting or assess fairness.

These outputs describe the supplied scenario; accounting definitions, capitalization terms and time periods must match the intended use. Malformed requests produce input errors. A successfully evaluated request can still contain false flags, empty result lists or a result outside the supplied threshold; those outcomes have the meanings stated above.

Alternative or Complementary methods

Choose Funds Allocation for this operation: Allocate a funding budget across caller-defined categories and relative weights. For a complementary task, use Cliff Vesting Schedule for this operation: Calculate whole vested shares at selected months for linear monthly vesting with a cliff.

The implementation reference documents the exact calculation, supported input shapes and returned fields.

References

Contribution Equity Split — tool.io

Similar or alternative tools

Funds Allocation
Allocate a funding budget across caller-defined categories and relative weights.
Cliff Vesting Schedule
Calculate whole vested shares at selected months for linear monthly vesting with a cliff.