What is a pool?
A pool is a community formed with the common goal of supporting each other and building a stronger future.
In a pool, each individual contractually pledges a small portion of future earnings — above a hurdle — to the shared pool. Pool contributions are generally distributed evenly.
Pool with those you believe in. When one of you succeeds, everyone succeeds.
EXAMPLE
POOL STORY
Keith
Jane
Grace
Pool Formation
Keith, Jane, and Grace join a pool together and come to an agreement on the following key pool terms: annual hurdle, contribution percentage, and duration.
The terms agreed upon are:
Annual Hurdle: $120,000
Contribution Percentage: 10%
Duration: 15 years
In addition to agreeing on these terms they have entered into a full pooling agreement.
Zooming in… A Year Snapshot
This year, Grace makes a very nice bonus on top of her impressive base salary. Her company is doing well, and her contributions to its success this past year really paid off.
Keith and Jane are at the early stages of founding their respective companies and are taking a founder’s salary to cover living expenses.
Grace $450,000
Keith $75,000
Jane $75,000
Contributions
Everyone in the pool keeps their first $120,000. So, only Grace will be contributing this year. Her eligible annual income is $450,000, $330,000 of which is above the annual hurdle. Based on her contribution percentage, Grace's total contribution that year comes out to $33,000.
Grace's Pool Contribution Breakdown
Eligible Income $450,000
Annual Hurdle $120,000
Eligible Income Net of Hurdle $330,000
Contribution Percentage 10%
Contribution for that Year (i.e. 10% of $330,000) $33,000
Grace
Distributions
Disclaimer: Pando takes a portion of the pool which varies based on selected set up fee. Contact us for more pricing info.
Pando takes a small fee, and the remainder is split amongst the three. This leaves each of them with a pool distribution of $10,450. They receive this cash directly upon distribution.
PRE-POOL POST-POOL
Grace $450,000 $427,450
Keith $75,000 $85,450
Jane $75,000 $85,450
ZOOMING OUT... IN RETROSPECT
THE POOL'S CUMULATIVE 15 YEARS
Disclaimer: Pando takes a portion of the pool which varies based on selected set up fee. Contact us for more pricing info.
Any remaining questions?
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