TL;DR: Here is a template for planning out cashflow and budgets for projects. Let’s use these to have a discussion about sustainability, the complexity & need for some global entities, and how to work together and improve all of this.
For our own work at SPADE in getting support for ERC1066 and the rest of FISSION Suite, and our new project around EVM Evolution, I modified a set of cashflow / budget planning spreadsheets that I’ve used to support new startups. It’s a vastly simplified version of Christoph Janz’s Point Nine Capital Financial Planning for SaaS startups.
Cashflow & Budget Planning Worksheet - Google Docs
File > Make a Copy.. so you can edit it. Please DO make comments directly on the sheet if you have questions
I developed these this summer and shared them with some of the ECF team when I heard that nothing like this was being used to support teams. I also used them for our ECF and EF grant submissions.
A startup (or new business), isn’t fundamentally different than an Ethereum project. The project may be inside an existing company, but in many cases grants go to individuals or teams who are thrown into the deep end of having to create new corporate entities. This means getting legal and accounting setup, getting banking facilities, and everything else around tracking cash, not running out of money, and planning for the future.
These worksheets are by no means done. Some of the issues include:
It assumes zero costs for an office or hardware.
They don’t really include a plan for annual taxes of a corporation.
They run at “break even” for the project – meaning there is no “margin” on top of paying people, meaning there is no buffer.
I started work on a recurring sponsorship model, which really needs to be expanded.
And, this is at the project level. If one company takes on multiple projects, then cashflow can be buffered and some expenses shared.
(I really need to document all these issues / assumptions)
Collaborating on Solving Issues
I had early discussions with Ben, the head of the Status Incubate program, of how to share resources on getting to sustainability as companies, as small teams, as projects.
The business model ring that @owocki kicked off is obviously related.
There are early discussions beginning about a couple of related topics.
One is how grants are handed out – if you don’t already have a company setup and need to scale beyond one person, all of this setup has to be repeated for each project. Does this mean grants should go to existing organizations? Or should individuals and small teams be encouraged to form? How should they be supported? How can we “share” some of this setup?
The second is the need for long term security & sustainability. One off bounties and small grants might fund a 3 - 6 month project. But a year or two years are more appropriate for some deep problems, especially in the sense of having the individuals working on it having it as their full time job – where they don’t need to be constantly looking at getting another small grant to keep going.
What Should People Get Paid?
Related to this is a discussion around market rates.
Apparently, for many individuals in the ecosystem, they were making very low rates compared to programming jobs in the industry.
It’s great that people want to work on open source – but if anything it should be MORE expensive, because it can be re-used and doesn’t need to be re-written multiple times.
Buffer – which is a transparent, global company with team members around the globe – has a public salary calculator for roles that might be a useful starting point for discussion. That page also links to their spreadsheet of all their staff salaries as a reference.
I had reviewed Open Collective for EthMagicians as one existing structure that could be used to support open source projects without having to setup an entity – but then a lot of the other work goes back to the individual who has to figure out the rules around laws and taxes in their home country (or rules for what it means to be a nomad worker).
This came up in Meta Magicians as well. We need to define the problems that we are solving. Some are “have a bank account” and “make sure taxes are paid”.
Others might be “formally employ or contract people in some country” or “help pay and manage health benefits” (cough USA cough).
My disclaimer? I’ve been thinking about this for a long time, and the foundation that @expede and I created – SPADE – was in part created to potentially be a friendly corporate entity that can help support individuals and teams with the fiat- and state-based world. I created an “open source” corporation 15 years ago in growing the Drupal ecosystem, and saw a lot of the same issues.
I knew this was going to be a problem for us, so thought about it a little ahead of time as part of the setup.
Oh, and Opolis – started around ETHDenver – may solve some of the portable entity issues. They have an entity in the US for starters.
Do we want to do a call to discuss this topic broadly?
What problems need to be solved?
I am putting up my hand to help people fill out these cashflow and budget worksheets for their project, including hiring plans, capturing other costs, and so on. Leave a comment or DM me and we can setup a call.