We’ve explored a number of different exit strategies, although we don’t really need to flesh out all of the details until later rounds. Some ideas we’ve thrown around:
- There’s a lot of for-profit interest in fintech from groups like Intuit, Blackbaud, etc. We’d obviously need to be careful from a mission alignment point of view, but the ultimate goal (as with any social enterprise) is to bake our theory of change into the way we make money so that it is genuinely valuable from a for-profit point of view to push our mission forward. This is harder with effective altruism than simply with broader social impact, as it adds additional constraints, but the process is similar (and we believe it’s achievable). This is something I’ve spent a lot of time thinking about from a product point of view, and it’s actually one of the main reasons we think it’s so important to hire an EA product manager (more than for many other roles).
- There are more creative setups we’ve seen work, like separating profits from decision making, so investors earn a higher percentage of profits while having a lower percentage of voting rights. There’s also a concept called Steward Ownership that we’re pretty excited about: https://​​medium.com/​​@purpose_network/​​whats-steward-ownership-14efc6caf9e7. You could also imagine exiting to a foundation, although this would bear other risks (e.g. reconsolidating decision making under the very mega-donors you were trying to diversify from).
I actually don’t think we have this fully answered yet, and I expect to spend significantly more time down the line exploring exit options that maintain profitability while advancing our mission.
Do you have an exit strategy? If you don’t, how did you convince VCs?
We’ve explored a number of different exit strategies, although we don’t really need to flesh out all of the details until later rounds. Some ideas we’ve thrown around:
- There’s a lot of for-profit interest in fintech from groups like Intuit, Blackbaud, etc. We’d obviously need to be careful from a mission alignment point of view, but the ultimate goal (as with any social enterprise) is to bake our theory of change into the way we make money so that it is genuinely valuable from a for-profit point of view to push our mission forward. This is harder with effective altruism than simply with broader social impact, as it adds additional constraints, but the process is similar (and we believe it’s achievable). This is something I’ve spent a lot of time thinking about from a product point of view, and it’s actually one of the main reasons we think it’s so important to hire an EA product manager (more than for many other roles).
- There are more creative setups we’ve seen work, like separating profits from decision making, so investors earn a higher percentage of profits while having a lower percentage of voting rights. There’s also a concept called Steward Ownership that we’re pretty excited about: https://​​medium.com/​​@purpose_network/​​whats-steward-ownership-14efc6caf9e7. You could also imagine exiting to a foundation, although this would bear other risks (e.g. reconsolidating decision making under the very mega-donors you were trying to diversify from).
I actually don’t think we have this fully answered yet, and I expect to spend significantly more time down the line exploring exit options that maintain profitability while advancing our mission.
Medium article throws a 404, FWIW.
Ah sorry, it keeps adding my punctuation to the hyperlink! Fixed