The idea taps into the charitable nature of entrepreneurs who may be incredibly time and cash poor. As the donation wouldn't be made until a business is sold, those joining the Founders Pledge scheme wouldn't give up anything initially but could make a huge difference when selling their business.
Damian Kimmelman, founder of Smarta 100 winner Duedil, is leading the scheme and asking other businesses to join him in committing 1% of equity. Kimmelman found inspiration for the idea on a recent visit to Ethiopia. While there, he witnessed Andy McLoughlin, co-founder of Huddle, give up 1% of his equity to Charity:Water and realised the potential of more entrepreneurs doing the same.
"I realised I could start getting involved with charities in a meaningful way without giving away time or money, both of which are currently in short supply," Mr Kimmelman said, "the majority of founders will have put most of their wealth into getting their company off the ground, so asking them for money isn't going to work."
Helping entrepreneurs do good
Although the website for the Founders Pledge is still a few weeks from launch, Kimmelman has already highlighted some of the inventive ways the scheme will generate donations. "We need to get venture capitalists and angel investors to sign up so this is a tick box option on funding contracts. It's something you have to do early on - it has to be there from the get go."
We will keep you updated on when the Founders Pledge website is live, how you can get involved and what the scheme achieves. We love the Founder Pledge and are excited to see entrepreneurs helping the society around them in another huge way.
Duedil provide free financial information on private businesses and offer premium reports on top of that. They recently raised £5m in funding, a signal that the 1% of equity could be a huge donation in the future.