Hey Austin, yes, the P-Units represent ongoing earnings paid out in cash for our members. In our case, there’s a whole Earnings Plan that comes with it to clarify the composition of the P-Units according to which contributions the enterprise values monetarily. (I plan to cover our specific model in a later article.)

Once the Dynamic Equity phase is over, the A-Units get converted to your share of C-Units, your slice of the pie. At that point in time A-Units will no longer be issued to new members. The equity allocation process has ended (usually, in a phase where there is no longer a big investment risk involved). New members who join after the end of dynamic equity get paid for their work in P-Units.

They may also elect D-Units, deferred payment, thereby effectively granting the enterprise a loan. This option may come handy for the enterprise in times of cash shortage. As with any loan, the person who lends money receives interests at usual market rates (15% or whatever it is) in exchange for the risk of maybe not seeing your money (again). I hope this helps to clarify.