Super interesting to read about this program! How did you persuade people to commit 50% of their exit to effective charities?
If folks were already earning-to-give minded and entrepreneurially inclined, the odds were that they would build and then give their wealth away (eg: Ratan Tata) so the counterfactual impact here is low. If they weren’t already earning-to-give minded, why were they signing up for an accelerator that requires them to give up 50% of their wealth?
Could you help me understand the mechanics of this a bit more? Super interesting work!
Thanks, great question! I can share some data we have from internal surveys and interviews we conducted though this will always be somewhat speculative and personal per founder.
I think it’s good to pull apart the decision to build and to give their wealth away because I think the mechanics and counterfactuals are different.
You’re right that we are not creating founders from scratch. In our pre-program surveys the median founder put their odds of founding something within three years at ~65–75% even if FTG hadn’t existed. So the counterfactual on whether they launch a startup is probably somewhat modest (we’re mostly accelerating and de-risking a decision people were already leaning toward). Please note that this is self-reported data—a somewhat smaller subset of participants had already taken steps towards building a startup like quitting their job so we might have made a bit more of an impact here.
However, there does seem to be a strong counterfactual on the giving. Asked what share of an exit they would have donated without the program, this was roughly 10%, whereas the program mandated a 50% minimum.
So why join if you’re not already a very committed 50%-giver?
Some of it is likely because people aren’t joining for the pledge specifically—but for the accelerator (cofounder matching, the selection signal, structure, community) and accepting the pledge as the entry condition.
But also, interestingly, when we asked our last cohort if the pledge was a positive or a negative reason, the cohort overwhelmingly said it was a positive reason to join (as they believed it would produce a cohort of truly aligned people). I believe only 1 person marked it as a slight negative in their decision.
When we asked the cohort more open ended-questions on why people decided to give so generously even when they hadnt considered this before, many of them just said that ‘noone had asked them before’ and ‘upon considering they just realised they weren’t launching this startup for the money anyway’. They also often mentioned the effect of all the others doing the same, and it being attractive to have mutual accountability.
So interesting! From the outset, this idea made no sense but now it feels quite ingenious.
It seems like this accelerator worked in a similar way to the Giving What We Can pledge – most people who sign that pledge would’ve probably already donated 2-3% of their wealth, but signing the pledge makes that number go up to 10% or more because the 10% anchor makes them rethink what an appropriate number might be and also provides social proof that it is a reasonable thing. Similarly here, the participants would’ve already given 10% away, but the program made it reasonable and socially validated to say “yeah, we’ll give half of it away, that sounds reasonable”. Is this a good rephrase?
Self-selection effects on the program are also interesting here—would you say the accelerator community was particularly better than any other accelerator community? More generous and helpful, similar core values, etc.
Hi there! I don’t have large scale data on this, but I do have the sense from speaking to our participants that many of them experienced a lack of culture fit with some other startup communities, which they experienced as very money driven, status obsessed or uncollaborative in a variety of ways, so I definitely think that having the pledge as a selection mechanism to find people who genuinely care about impact was an attraction to some of our participants.
Super interesting to read about this program! How did you persuade people to commit 50% of their exit to effective charities?
If folks were already earning-to-give minded and entrepreneurially inclined, the odds were that they would build and then give their wealth away (eg: Ratan Tata) so the counterfactual impact here is low. If they weren’t already earning-to-give minded, why were they signing up for an accelerator that requires them to give up 50% of their wealth?
Could you help me understand the mechanics of this a bit more? Super interesting work!
Thanks, great question! I can share some data we have from internal surveys and interviews we conducted though this will always be somewhat speculative and personal per founder.
I think it’s good to pull apart the decision to build and to give their wealth away because I think the mechanics and counterfactuals are different.
You’re right that we are not creating founders from scratch. In our pre-program surveys the median founder put their odds of founding something within three years at ~65–75% even if FTG hadn’t existed. So the counterfactual on whether they launch a startup is probably somewhat modest (we’re mostly accelerating and de-risking a decision people were already leaning toward). Please note that this is self-reported data—a somewhat smaller subset of participants had already taken steps towards building a startup like quitting their job so we might have made a bit more of an impact here.
However, there does seem to be a strong counterfactual on the giving. Asked what share of an exit they would have donated without the program, this was roughly 10%, whereas the program mandated a 50% minimum.
So why join if you’re not already a very committed 50%-giver?
Some of it is likely because people aren’t joining for the pledge specifically—but for the accelerator (cofounder matching, the selection signal, structure, community) and accepting the pledge as the entry condition.
But also, interestingly, when we asked our last cohort if the pledge was a positive or a negative reason, the cohort overwhelmingly said it was a positive reason to join (as they believed it would produce a cohort of truly aligned people). I believe only 1 person marked it as a slight negative in their decision.
When we asked the cohort more open ended-questions on why people decided to give so generously even when they hadnt considered this before, many of them just said that ‘noone had asked them before’ and ‘upon considering they just realised they weren’t launching this startup for the money anyway’. They also often mentioned the effect of all the others doing the same, and it being attractive to have mutual accountability.
Hopefully this helps!
So interesting! From the outset, this idea made no sense but now it feels quite ingenious.
It seems like this accelerator worked in a similar way to the Giving What We Can pledge – most people who sign that pledge would’ve probably already donated 2-3% of their wealth, but signing the pledge makes that number go up to 10% or more because the 10% anchor makes them rethink what an appropriate number might be and also provides social proof that it is a reasonable thing. Similarly here, the participants would’ve already given 10% away, but the program made it reasonable and socially validated to say “yeah, we’ll give half of it away, that sounds reasonable”. Is this a good rephrase?
Self-selection effects on the program are also interesting here—would you say the accelerator community was particularly better than any other accelerator community? More generous and helpful, similar core values, etc.
Hi there! I don’t have large scale data on this, but I do have the sense from speaking to our participants that many of them experienced a lack of culture fit with some other startup communities, which they experienced as very money driven, status obsessed or uncollaborative in a variety of ways, so I definitely think that having the pledge as a selection mechanism to find people who genuinely care about impact was an attraction to some of our participants.