Page Text: Select Page
How to Pledge 1% of Equity
Pledging 1% of equity can be one of the most effective ways to give as a company—and one of the easiest to execute as an early stage company. There are just a few quick steps required to process the pledge and after that, your giving will naturally grow with your company. Pledge 1% of equity today, then we’ll follow up with template paperwork and everything else you need to complete your pledge.
Ways to Give Equity
There are a couple of options to consider when pledging equity. You can pledge:
Company equity. The earlier you set aside corporate equity, the better. Not only is it easier to commit when you have less cooks in the kitchen (i.e. a cleaner cap table), but it also sets the tone for your current/future funders and employees on where your priorities lie. For smaller startups, it is also a way to give before you see profit. That said, it is possible to set aside equity later in the game (e.g. Twilio and Okta executed on a late stage corporate equity pledge).
Personal equity as a founder. Personal equity pledges are easy to implement as you do not require board or stakeholder approval to pledge (as you might for your company equity). They are most beneficial if they are formalized right before a liquidity event when shares are worth the most. We can put you in touch with one of our preferred execution partners to learn more about the fulfillment of this option.
A combination of personal and corporate equity. Many founders first pledge their personal equity as a gateway to securing a company equity pledge. You are welcome to do both.
It’s important to note that pledging equity does require formalization through legally binding paperwork. You may want to seek financial/legal advice before moving forward. With that said, we’ll provide you high-level guidance on the equity allocation process in your country of incorporation, options for where to hold your equity (i.e. Donor Advised Fund or private corporate foundation), and key considerations to take into account before finalizing your pledge.
Where to Start
If you are at an early stage, finalize your company equity donation as soon as possible. The sooner, the better from an ease of execution standpoint!
If you are a late-stage company, we recommend connecting with existing companies who have gone through this process to learn from their experience. We would be happy to intro you to other Pledge 1% members who have gone through this process at a similar stage and who can guide you on next steps.
No matter your company’s stage or size, take the pledge as the first step today.
Member Highlight: Twilio
Twilio started by giving product from their communications platform to social impact organizations. They also launched an employee volunteer program through Twilio.org . But they had a larger vision and idea to give back: impact investing.
To scale, Twilio pledged 1% of equity over the next 10 years and launched a Donor Advised Fund [DAF] at Tides to hold and protect the assets of Twilio.org. Through grants and strategy investments, Twilio is working with partners around the globe to have a major impact, including Omidyar Network, Kapor Capital, Village Capital and Draper Richards Kaplan Foundation, as well as Fast Forward Accelerator and the Bill & Melinda Gates Foundation. These partnership have not just allowed Twilio to invest more, but has enabled organizations to learn as they invest, so they get the benefits of expanding and tailoring their social impact strategies and social enterprises get access to investments. It’s a mutually beneficial system that’s having a great impact.
“We started Twilio.org to empower nonprofits and social enterprises with communications technology to improve lives around the world. Today, we’re able to ignite positive social change on a global scale by leveraging not only the funding made possible through our 1% equity commitment, but also the full power of the Twilio product platform coupled with technical and strategic support from our passionate employees and our developer network.”
— Jeff Lawson, Co-Founder & CEO, Twilio
See a full list of companies who have pledged.
Pledge 1%