Not part of Founderâs Pledge, but AIM did consider quite a few models like this when doing our founding-to-give program. Our pledge is higher, with 50% above $1M being the minimum. Right now, both ours and Founderâs Pledge connect to individual giving (aka the profit the cofounder would take home personally) instead of, e.g., committing the company itself to donate. They are also both pretty âcleanâ models as they do not require a heavy administrative burden to take stocks, investments, deal with dilutions, etc.
Net, I think both models slightly benefit the companies with almost no impairment to them, which I think would not be the case with heavier models (e.g., directly taking stock, requiring company donated profits, etc.). Our reason for going this way was:
Our sense was that typical investors are far less excited about companies that would have to donate/âtake ethics into account and somewhat less excited about those who have given away any sort of equity
Our sense was the founders typically are founders due to wanting control, so the more control we asked for/ârestrictions we put in place, the fewer high-talent founders would be keen
The admin cost for this is pretty intense, especially for an NGO, so we would have to think that it would have a major upside vs e.g., someone taking a 50% pledge and donating via their own DAF or foundation.
Aside from these complications I also donât see much if any benefit to regular founders of this âgive away equity earlyâ arrangement outside the scope of support from an AIM or a similar social enterprise organization that actually aims to help their business.
Founderâs Pledge pitch to founders (and other HNW individuals) is straightforward: pledge to give away part of your wealth when you think itâs optimal from the perspective of value maximization, donation opportunities, exit strategy, tax efficiency and theyâll present donation opportunities which align with your priorities and approach to evidence.
Whereas this proposal seems to be âgive us some of your equity and weâll decide if, when and what we donate it toâ. If founders want a fund to do the allocations for them theyâll find funds that will accept their equity as soon as it becomes liquid anyway, and those funds will be able to make decisions on cashing out and disbursal without the admin costs of being small shareholders in many pre-profit or never to be profitable startups so theyâll probably be more efficient at doing so.
I think thereâs probably room for more variations on the Founderâs Pledge model, but I donât see this proposal being it in its current form.
Not part of Founderâs Pledge, but AIM did consider quite a few models like this when doing our founding-to-give program. Our pledge is higher, with 50% above $1M being the minimum. Right now, both ours and Founderâs Pledge connect to individual giving (aka the profit the cofounder would take home personally) instead of, e.g., committing the company itself to donate. They are also both pretty âcleanâ models as they do not require a heavy administrative burden to take stocks, investments, deal with dilutions, etc.
Net, I think both models slightly benefit the companies with almost no impairment to them, which I think would not be the case with heavier models (e.g., directly taking stock, requiring company donated profits, etc.). Our reason for going this way was:
Our sense was that typical investors are far less excited about companies that would have to donate/âtake ethics into account and somewhat less excited about those who have given away any sort of equity
Our sense was the founders typically are founders due to wanting control, so the more control we asked for/ârestrictions we put in place, the fewer high-talent founders would be keen
The admin cost for this is pretty intense, especially for an NGO, so we would have to think that it would have a major upside vs e.g., someone taking a 50% pledge and donating via their own DAF or foundation.
Aside from these complications I also donât see much if any benefit to regular founders of this âgive away equity earlyâ arrangement outside the scope of support from an AIM or a similar social enterprise organization that actually aims to help their business.
Founderâs Pledge pitch to founders (and other HNW individuals) is straightforward: pledge to give away part of your wealth when you think itâs optimal from the perspective of value maximization, donation opportunities, exit strategy, tax efficiency and theyâll present donation opportunities which align with your priorities and approach to evidence.
Whereas this proposal seems to be âgive us some of your equity and weâll decide if, when and what we donate it toâ. If founders want a fund to do the allocations for them theyâll find funds that will accept their equity as soon as it becomes liquid anyway, and those funds will be able to make decisions on cashing out and disbursal without the admin costs of being small shareholders in many pre-profit or never to be profitable startups so theyâll probably be more efficient at doing so.
I think thereâs probably room for more variations on the Founderâs Pledge model, but I donât see this proposal being it in its current form.