Founder Equity
A contribution-led method for setting NS ownership without copying legacy Beach Club Pizza percentages.
Founder Framework
Current state
Percentages Are Not Final
NS founder percentages have not been approved. Robert Krauss, Shaun Vanalphen, and Matthew “Randy” Watson are the continuing founders considered in the analyses, but their Beach Club Pizza ownership should not automatically determine NS ownership.
Recommendation
Use Verified Base Equity Plus Objective Earn-In
Issue base equity only for verified contributions and bind additional role-based equity to written, measurable, time-bound milestones. Keep an approved strategic reserve authorized but unissued until a specific grant is approved.
Read from the proposed 100% Northern Standard model through the paired founder-pool and reserve ranges, then into the paired base and earn-in ranges.
Base equity, role earn-in, and strategic reserve must remain separate so the same contribution is not paid twice.
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The recommended fully diluted model pairs an 85 to 90% founder pool with a 10 to 15% strategic reserve. Within the founder pool, a 70 to 85% verified base pairs with a 15 to 30% prospective earn-in over 24 to 36 months. Every range is pending evidence and agreement. The model is not an automatic roll-forward of Beach Club Pizza ownership.
An example 72 / 18 / 10 model can demonstrate mechanics: 72% issued base equity, 18% role-based earn-in, and 10% strategic reserve. It is illustrative only, not the final founder allocation.
Contributions and Earn-In
The contribution ledger documents founder inputs before percentages are set and converts forward roles into measurable equity earn-in.
Contribution Ledger
Recommendation
Evidence Before Percentage
Build a founder-by-founder ledger with the contribution, date, ownership, evidence, economic relevance, prior compensation, risk assumed, transferability, and whether the item is already reflected elsewhere.
| Category | Evidence standard | Equity treatment |
|---|---|---|
| Cash and paid expenses | Bank, invoice, ledger and reimbursement history | Verified base if not repaid or otherwise compensated |
| Transferred ownership or IP | Executed title and assignment records | Base only after valid transfer and valuation |
| Personal guaranty exposure | Executed guaranty, duration and actual risk | Case-specific; avoid automatic permanent equity |
| Past labor | Documented scope, duration and compensation | Base only if economically material and not paid |
| Forward executive role | Written charter and objective milestones | Time-bound earn-in with vesting |
| Relationships and opportunity | Specific, attributable and durable value | Conservative treatment with evidence |
Role-Based Earn-In
Read from the first six months through final measurement in the 24 to 36 month window.
Time, role-specific milestones, and shared enterprise outcomes should be measured separately, with written cure, departure, and documentation mechanics.
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- Months 0 to 6: Confirm role charter, baseline evidence, and first milestones
- Months 6 to 18: Measure time vesting and role-specific operating outcomes
- Months 18 to 30: Test shared enterprise outcomes and cure any gaps
- Months 24 to 36: Complete final measurement, documentation, and any approved issuance
Current state
Working Role Structure
The analysis considers Robert in the CEO and group-lead role, Shaun in the culinary and concept role, and Randy in the development and execution role. These are working role descriptions, not a grant or final authority assignment.
Define Measurable Role Outcomes
OpenSet milestones for financing, reporting, systems, culinary standards, concept development, site execution, opening readiness, and other role-specific results.
Set Vesting and Measurement
OpenDefine time and milestone vesting, review dates, objective evidence, cure periods, partial achievement, independent validation, and dispute resolution.
Set Departure Treatment
OpenDefine good-leaver, bad-leaver, death, disability, termination, voluntary departure, repurchase, valuation, payment terms, and any acceleration.
Needs verification
Tax and Securities Treatment
Counsel and tax advisers should review profits interests, capital interests, restricted equity, 83(b) elections, compensation income, withholding, securities exemptions, and state-specific consequences before issuance.
Governance and Economics
- Value only verified cash, assets, rights, guarantees, labor, relationships, systems, and opportunity contributions.
- Avoid paying twice for the same contribution through base equity and earn-in.
- Tie earn-in to outcomes each founder can influence.
- Define vesting, measurement, cure, departure, repurchase, acceleration, and dispute mechanics in writing.
- Keep investor rights and any capital raise separate from founder service equity.
Decision required
Founder Bargain
Approve the contribution ledger, role charters, equity bands, final percentages, reserve, governance, vesting, departure treatment, tax elections, and documentation process as one coherent bargain.