I'm currently supervising a project with investors, and the following problem arrived:
- How should I calculate the profits of each investor, i.e. should profit itself (after taxes and other deductions) be proportional to a (invested amount x time past since investment) factor, or should total revenue (amount invested + profit) be proportional to this factor?
I am a total newbie when it comes to these things, and I want to be sure I'm not using the wrong model here, as so not to have an investor complaining to me on how they should have earned more than they did. Also, an explanation of what each model is better for and maybe other models would be great!
Thanks in advance.