Equity Percentages

Next class period, we're going to be talking about the structure and name of our studio. The studio will be an LLC with all of the team members as partners.

As per Roger's suggestions, we will have the team leads be voting partners and the artists/programmers be equity partners. We want to go for this solution for legal ease. It will be a lot easier in the future if we only need four signatures rather than 10.

Robert and I got onto the topic of what would happen if a team member left the group or did not perform adequately. I think this is a good topic to bring up, especially in the incident that a team member wants to leave the team but is still getting paid. Team members won't want that to happen so we need a way to remove equity from team members.

I thought about this awhile ago. I think there should be a system in place so that if a team member doesn't work on the game, they can be removed but I also don't want to set an atmosphere of distrust in the team. I want there to be an incentive system but also a sense of trust so the team trusts the team leaders to make decisions.

I think that all team members should be evaluated by the team leads. In the situation of a unanimous team lead vote, a team member can be removed from the group. Their percentage of the game would then be distributed to the other team members, not the team leads. This gives incentive to the team members to work but also makes it so that team leads can't make decisions  that give them more money. The decision won't affect the shares of team leaders at all.

In a situation where a member choose to leave the company on their own, their share would be split equally among all team members.

I also propose that 5%-10% of our equity should go towards advertising, web fees, and administration fees. It might have to be more depending on how much money is made but I think it would be good to set aside.

Just my thoughts. I have to talk to my lawyer about it.