Marble's Equity Distribution Model

The Marble's Equity Distribution model can be used by very early stage founders to fairly split equity among themselves. The key aspect of the model is to split the Equity across the founders based on their contributions to different Areas such as Sales, Marketing, Technology, etc (see Col. 'Area'), where each Area is assigned a relative weight (see Col. 'AreaContrib').

For the calculation shown below, number of founders is set as N=3, with the weight of the Marble W=2. In a hypothetical set-up all founders contribute equally to every area, the Equity split per head in that case is 32 (see Col. 'AreaContribPerFounder') or the Marble split per head is 16 (see Col. 'MarblePerAreaContribFounder').  

However, in reality the 1st founder (Fndr_1) is more of a Ops., Customer Support, HR generalist with some prior domain knowledge and the idea. Fndr_2 is the technologist with some strategy & management experience expected to come up with smart digital solutions. Fndr_3 carries wide Sales, Marketing, Ops, experience along with the Relations among the Investor. Fndr_3 also brought in the lions share of the initial seed capital used to boot the startup.

After the re-balancing of the marbles the Final Equity distribution stands at 23, 33 & 44 for the three founders. A further 5 - 7 % of re-balancing could take place depending upon the discussions and negotiations between the founders. While there is a no correct way of equity distribution having a framework like the Marble Equity Distribution helps to keep the process objective and free from let downs, clashes and unfairness.

S.No	Area	AreaContrib	AreaContribPerFounder = AreaContrib/ NoFounders	MarblePerAreaContribFounder = AreaContribPerFounder / WeightMarble	Fndr_1	Fndr_2	Fndr_3
1	Sales	22	7	3.5	0	-3.5	3.5
2	Marketing	10	3	1.5	-1.5	-1	2.5
3	Technology	20	7	3.5	-3.5	7	-3.5
4	Operations, Customer Support	10	3	1.5	0.5	-1	0.5
5	HR	10	3	1.5	-1	2	-1
6	Legal	3	1	0.5	-0.5	-0.5	1
7	Finance, Payroll	5	2	1	-1	-1	2
8	Investor Relations, Networking	10	3	1.5	-1.5	-1	2.5
9	Initial Investment, Seed Capital	10	3	1.5	-1.5	-1	2.5
10	Total	100	32	16	-10	0	10
11	Initial Distribution				33	33	34
12	Final Distribution				23	33	44
	NoFounders (N)	3
	WeightMarble (W)	2