Tyler Tringas

So we designed the shared earnings agreement and the way that it works is you can think of it essentially as like a baseline, one of these convertible instruments, right?

So in the sense that we invest an amount of money up front, you can convert a percentage and say, okay, you know, we...

just to give numbers, that's a hundred K and that means 10%.

And, um, you know, that's where you start.

Right.

Exactly.

Yeah.

There's a basic, simple formula that says, okay, this converts at this amount.

Yep.

And, um, yeah, we call it, you know, valuation cap and stuff like that.

Yeah.

Right, exactly.

So that's a baseline.

And that is the percentage of the company that we get if you sell the company, or if you raise another round, you know, you go on, you say, hey, actually, we're going to raise 2 million bucks, and we're going to take a big swing at this, you know, okay, earnest ownership is going to convert into that percentage.

There's a separate piece, which is called shared earnings, which says, hey, if you get to a point where you are very profitable, right, so you are, and we define this with this term called founder earnings, which is

There's this classic problem where the company is profitable and then the founders basically decide how much they want to chop it up into a really nice salary for themselves versus dividends that they then share with their investors.

We say, look, we don't want to get into a debate about what's salary and what's dividends because usually how that plays out is you have a board level discussion about what is a fair salary and it's all just kind of silly.

We just say, lump it together.

If it's above a certain threshold, then we are entitled to a piece of it.

Whether your accountant tells you it should be a $700,000 a year salary or $100,000 a year salary and 600K in dividends, you choose.