SEAL Calculator Public v1.0
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Shared Earnings Agreement Calculator v1.0
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Starting point: you've launched your side MVP, after 3 months of iterating and organic customer growth, it's making $2-5k MRR, the pathway ahead looks good and you need to decide how to go full-time
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Inputs
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Further reading
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SEAL
📺Watch a screencast about this
https://www.useloom.com/share/c5193b11bc2e4e5f8c474433f2c41112
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Investment$150,000
📑Read about SEAL
https://earnestcapital.com/shared-earnings-agreement/
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# of Founders1
🔎View the terms sheet
https://docs.google.com/document/d/1MoLiH_VnhX-0vfZ1zgMSfpcIt0rdyD9rc27BbypplDI/edit
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The Percentage20%
🕺Read about the origin
https://earnestcapital.com/funding-for-bootstrappers/
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Shared Earnings Cap Multiple3
🙌Apply to Earnest
https://earnestcapital.com/apply/
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Shared Earnings Cap$450,000
📣Send Us Feedback
https://twitter.com/earnestcapital
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Valuation Cap$3,000,000
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Founder Earnings Salary Threshold$120,000
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Minimum Salary for Full-time$120,000
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Year12345678910
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Bootstrap Case
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MRR $ 2,500 $ 5,000 $ 12,000 $ 25,000 $ 40,000 $ 65,000 $ 100,000 $ 150,000 $ 175,000 $ 200,000
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Annual Revenue $ 30,000 $ 60,000 $ 144,000 $ 300,000 $ 480,000 $ 780,000 $ 1,200,000 $ 1,800,000 $ 2,100,000 $ 2,400,000
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Overhead, Hosting, SaaS/mo $ 500 $ 1,000 $ 1,250 $ 2,500 $ 4,000 $ 6,500 $ 10,000 $ 15,000 $ 17,500 $ 20,000
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# of Employees00123456810
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Avg $/Employee/Mo $ 3,000 $ 3,000 $ 5,000 $ 5,000 $ 6,500 $ 7,000 $ 7,500 $ 8,000 $ 8,500 $ 9,000
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Employee Cost/mo $ - $ - $ 5,000 $ 10,000 $ 19,500 $ 28,000 $ 37,500 $ 48,000 $ 68,000 $ 90,000
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Other Costs/mo $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
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Net Income to Founders $ 24,000 $ 48,000 $ 69,000 $ 150,000 $ 198,000 $ 366,000 $ 630,000 $ 1,044,000 $ 1,074,000 $ 1,080,000
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From this Founders can choose to pay themselves a salary, issue owner's draw/dividends, or reserve cash in the business
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$ per Founder $ 24,000 $ 48,000 $ 69,000 $ 150,000 $ 198,000 $ 366,000 $ 630,000 $ 1,044,000 $ 1,074,000 $ 1,080,000
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Shortfall to full-time salary $ (96,000) $ (72,000) $ (51,000) $ - $ - $ - $ - $ - $ - $ -
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Founder full-time?yesyesyesyesyesyesyes
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SEAL Case
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Because founders go full-time earlier, we assume MRR trajectory increases
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MRR $ 20,000 $ 30,000 $ 40,000 $ 50,000 $ 60,000 $ 85,000 $ 130,000 $ 175,000 $ 200,000 $ 250,000
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Overhead, Hosting, SaaS/mo $ 500 $ 1,000 $ 4,000 $ 5,000 $ 6,000 $ 8,500 $ 13,000 $ 17,500 $ 20,000 $ 25,000
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# of Employees5555556789
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Avg $/Employee/Mo $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,500 $ 6,000 $ 6,500 $ 7,000
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Employee Cost/mo $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 33,000 $ 42,000 $ 52,000 $ 63,000
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Other Costs/mo $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
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Pre-Founder Net Income $ (66,000) $ 48,000 $ 132,000 $ 240,000 $ 348,000 $ 618,000 $ 1,008,000 $ 1,386,000 $ 1,536,000 $ 1,944,000
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"Founder Earnings" $ - $ - $ 12,000 $ 120,000 $ 228,000 $ 498,000 $ 888,000 $ 1,266,000 $ 1,416,000 $ 1,824,000
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SEAL % of Founder Earnings Calculated $ - $ - $ 2,400 $ 24,000 $ 45,600 $ 99,600 $ 177,600 $ 253,200 $ 283,200 $ 364,800
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SEAL % of Founder Earnings Cumulative $ - $ - $ 2,400 $ 26,400 $ 72,000 $ 171,600 $ 349,200 $ 602,400 $ 885,600 $ 1,250,400
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SEAL % of Founder Earnings Actual $ - $ - $ 2,400 $ 24,000 $ 45,600 $ 99,600 $ 177,600 $ 100,800 $ - $ -
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Net Income to Founders $ (66,000) $ 48,000 $ 129,600 $ 216,000 $ 302,400 $ 518,400 $ 830,400 $ 1,285,200 $ 1,536,000 $ 1,944,000
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From this Founders can choose to pay themselves a salary, issue owner's draw/dividends, or reserve cash in the business
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$ per Founder $ (66,000) $ 48,000 $ 129,600 $ 216,000 $ 302,400 $ 518,400 $ 830,400 $ 1,285,200 $ 1,536,000 $ 1,944,000
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Founder full-time?yesyesyesyesyesyesyesyesyes
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Shortfall to Full-time Salary $ - $ (72,000) $ - $ - $ - $ - $ - $ - $ - $ -
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Shortfall covered by Investment Cash $ - $ 72,000 $ - $ - $ - $ - $ - $ - $ - $ -
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Remaining Shortfall for the year $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
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Investment remaining $ 150,000 $ 78,000 $ 78,000 $ 78,000 $ 78,000 $ 78,000 $ 78,000 $ 78,000 $ 78,000 $ 78,000
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Lifetime Comparison Metrics
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BootstrapSEAL
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Founder(s) can go full-time in year41-2
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Founder Compensation year 1-3 $ 141,000 $ 183,600
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Total Founder Compensation year 4-7 $ 1,344,000 $ 1,867,200
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Total Founder Compensation year 8-10 $ 3,198,000 $ 4,765,200
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What happens if I sell the business?
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Year of Sale9
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Unpaid Return Cap in year $ -
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SEAL has a residual stake of5.0%
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Sale for x times Net Income to Founders5
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Sale Price Bootstrap $ 5,370,000
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Exit per founder $ 5,370,000
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Sale Price SEAL $ 7,680,000
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Paid to SEAL $ 384,000
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Net Sale Proceeds to Founders $ 7,296,000
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Exit per founder $ 7,296,000
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