Founders Pledge launches venture capital arm, Pledge Ventures, to create a new ‘flywheel’ in philanthropy
Founders Pledge is a London-based charity initiative, in which entrepreneurs legally commit to donate a portion of their personal cash income to charity when they exit.
Launched in 2015, the initiative was designed to help social entrepreneurs build and scale their efforts.
The minimum commitment for entrepreneurs is 5% of their liquidity event, although entrepreneurs reportedly commit around 11% on average.
Notable Founders Pledge members include Niklas Adalberth, founder of Klarna and Norrsken Foundation, Eric Wahlforss, former founder of SoundCloud, and Mustafa Suleyman, co-founder of Google DeepMind. Member companies of the 1800 Founders Pledge include Snyk, Front and Alan, along with rising stars Ledgy, Tessian and Otrium.
Starting in London, it now has offices in Berlin, New York and San Francisco and has partnered with Y Combinator.
Now he is creating a new initiative that he hopes will empower projects ‘for good’ in a new way.
Although Pledge Ventures launched last year, it is now revealing its model and the first closing of its fund.
Pledge Ventures will be a new ‘rules-based’ venture fund designed to invest in high-growth tech companies whose founders have ALSO committed to philanthropy through the Founders Pledge. In other words, creating a ruffle effect.
The first closing amounts to $38 million and they plan to close more rounds.
The fund will aim to generate returns for investors while supporting the non-profit mission of the Founders Pledge. Here’s how it’ll work: You’ll donate 85% of accrued interest and up to 50% of management fees to charity. This, the organization says, will further fund the operations of the Founders Pledge, build up a long-term capital endowment, and, as it says, “scale its impact.”
Pledge Ventures will invest in late-stage rounds of high-growth technology companies that raise more than $20 million in a Series B round or later, involving a top-tier fund.
Founders Pledge founder David Goldberg told me on a call: “We only invest Series B plus, only in Founders Pledge members, and only with top-tier VCs participating in the rounds. It’s an algorithmic investment, basically. So we don’t make judgments about what is good or not. We invest in every founders’ pledge signatory who is raising $20 million or more in a Series B or later with a top-tier VC participating. We are able to participate in these very hot, very oversubscribed rounds that are inaccessible to everyone else, because of the alignment that the fund has with the key decision maker of the company. So we’re going to invest in very, very hot rounds where the profits accrue to charity.
The Pledge Ventures team will also include David Goldberg (CEO of Founders Pledge, Pledge Ventures partner) and Niki Buys (Founders Pledge chief of staff, Pledge Ventures COO), and the founding team is supported by the fund global venture capital. companies
In a statement, Pledge Ventures CEO Ben Gammon said: “The enthusiasm for the concept has been overwhelming. Exceeding our growth target in the current environment is a testament to the belief our LPs have in the innovative approach of Pledge Ventures and the commitment of the Founders Pledge community to driving positive change.”
Andreas Haug, founding partner of Headline Ventures, heads the Voluntary Investment Committee for Pledge Ventures, along with Sasha Trower, Jon Koplin, Garth Timoll and Stefan Wiskemann.
Investment Committee Chairman Haug said: “Pledge Ventures is leading the charge to create a new venture capital model that not only generates returns for investors, but also contributes to the long-term sustainability of charitable work.” .
Limited partners in Pledge Ventures, of course, include many Founders Pledge members.
Taavet Hinrikus, founder of Wise, added: “This group of founders contains some of the most important technology companies of our future. Investing in them gives us a piece of their advantage and ensures the long-term success of the Founders Pledge. I am very excited to anchor this fund.”