Why I Gave Away 1% of My Startup
Why I Gave Away 1% of my Startup
Jason Payne, Founder, Ada Diamonds
Any founder knows that one of the most difficult decisions an early founding team has to make is how much equity to give to employees, advisors, and investors. The easiest equity decision I’ve ever made? Giving away 1% of my company.
Today, on Giving Tuesday, Ada Diamonds is proudly joining Pledge1% by donating 1% of our equity to the Tides Foundation, a philanthropic partner and nonprofit accelerator. Upon an IPO or acquisition of Ada Diamonds, the proceeds will be used to fund philanthropic endeavors of our choosing.
Furthermore, we are committing to a donation of no less than 1% of Ada’s annual profits for the lifetime of the company.
Pledge 1% is a movement spearheaded by Salesforce and Atlassan to inspire young companies to pledge a small portion of future success today to have a large impact in the future.
Why was this an easy decision? My wife and I co-founded Ada Diamonds in 2015 on the belief that diamond jewelry should brighten the entire world, not merely the recipient’s world. To achieve that goal, Ada Diamonds proudly utilizes laboratory-grown diamonds that are sustainably cultivated by mankind above the Earth. Ada refuses to work with ‘dirt diamonds’ that are mined out of the Earth.
Sustainable, Conflict Free Diamond Engagement Ring, Grown Above the Earth
In other words, we believe that powerful technology and new ideas can polish the diamond industry and create a more brilliant future for all.
At Ada Diamonds, our CSR efforts pre-date our Pledge of 1%. We call our efforts the Sixth Element Program in honor of carbon, the sixth element of the periodic table of elements. We are proud to support the following six organizations in their efforts to brighten the world:
There are a few key advantages to donating the equity early in the life of Ada Diamonds:
- We set in stone the philanthropic trajectory of the company. The donated equity is now owned by a charitable foundation and cannot be recalled.
- We create a culture of giving, where it is easy for present and future members of our team to pledge a portion of their stock to causes close to their hearts.
- We prevent a veto by future board members choosing to block philanthropic efforts in the interest of their LPs.
- We signal a long term, deep commitment to the NGOs we are currently supporting.
Corporate and personal philanthropy have always been important to me. Before founding Ada Diamonds, I was the founder of the Philanthropy Engineering Program at Palantir Technologies. In that role, I donated big data analysis software and forward deployed engineering resources to help data driven nonprofits better fulfill their missions.
One my focus areas at Palantir, fighting modern day slavery, led me to start Ada Diamonds. Much to my dismay, there is still bonded and child labor involved in the cutting of diamonds into gemstones, as highlighted in this recent AP report:
Many of the organizations Ada is supporting today are organizations that I had the pleasure of supporting while at Palantir. Here’s President Clinton discussing recovery efforts of Team Rubicon that we supported after Hurricane Sandy, and here’s the CEO of Direct Relief discussing how they use data analysis to improve lives around the world.
We chose to make our pledge on Giving Tuesday as we believe in both givingand gifting during the holiday season. For many young companies, Q4 is an intense and frantic time of year, when ‘making the world a better place’ can fall by the wayside. However, we believe that companies do well by doing good.
If you are a founder or early employee of a company, I encourage you to exploring joining the Pledge1% movement.
If you work at a large company, I encourage you to explore the CSR efforts of your employer. They may have a donation matching program or offer opportunities to volunteer with local charities.
Regardless of your employment status, I encourage you to find a cause you believe in and support them with a donation of your time or financial resources. If you happen to own either Bitcoin and Ethereum, now might be a great time to give BTC or ETH to a cause you support. Guidestar and Charity Navigator are great resources to find organizations worthy of your support.