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YC and Founders Pledge

blog.ycombinator.com

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Re: YC and Founders Pledge

#31

Post by ernestipark »

loeg wrote: post #17
mkagenius wrote: post #7

Earlier quoted context omitted.

> Donor-Advised Fund This sounds more like mumbojumbo to me

It's a common way to claim tax benefit now, but control (to some extent) giving in the future. E.g., * https://www.vanguardcharitable.org/ * https://www.fidelitycharitable.org/

These are great avenues for any employee that receives equity to 1. maximize their tax savings, 2. give to charities they care about (in the US). Any stock that's held for over a year that qualifies for long term capital gains can be transferred to a DAF like with Vanguard or Fidelity and you won't be taxed on it at all. Especially if you have a set budget for giving to charities this is a great way to maximize your dollar and extend your budget.

Re: YC and Founders Pledge

#32

Post by nostrademons »

BinaryIdiot wrote: post #8

I understand giving to charity is great and all but what about employees 10, 35, 97? So someone works hard at a start-up but they weren't among the first dozen or so to join then they likely get next to nothing from an exit. So how about, instead of a pledge to give to charity, founders pledge to give more equity to later employees so only a small handful are not the only ones to profit. Everyone takes a risk joining…

Andrew Mason/Detour proposed something along those lines, but I haven't heard anything more about it since:

https://news.ycombinator.com/item?id=9336392

Re: YC and Founders Pledge

#33

Post by imbenclifford »

BinaryIdiot wrote: post #8

I understand giving to charity is great and all but what about employees 10, 35, 97? So someone works hard at a start-up but they weren't among the first dozen or so to join then they likely get next to nothing from an exit. So how about, instead of a pledge to give to charity, founders pledge to give more equity to later employees so only a small handful are not the only ones to profit. Everyone takes a risk joining…

Ben from FP here. To be clear, founders aren't giving away equity - they are pledging a percentage of what they personally receive on exit. This doesn't reduce the equity that is available for other shareholders.

Re: YC and Founders Pledge

#34

Post by mathattack »

My (limited) understanding is it can be tax-advantageous for founders to give equity rather than cash. They can avoid capital gains taxes. So if a founder will give, best to do it this way. One can say they should be generous to their employees, but at some point they will still have wealth to spread around. And if you're giving it to charity, you might as well do it this way.

Similarly, when Warren Buffett and Bill Gates give their fortunes away, they do it via stock.

Re: YC and Founders Pledge

#36

Post by gfosco »

There wasn't anything stopping founders from donating to charity before, or from claiming they will in the future, so what does this accomplish other than putting a procedure in place for shameless virtue signaling?

Giving to charity is powerful. Talking about giving to charity or telling people you will conditionally give to charity in the future, is transparently self-serving.

Re: YC and Founders Pledge

#37

Post by nhaliday »

gfosco wrote: post #36

There wasn't anything stopping founders from donating to charity before, or from claiming they will in the future, so what does this accomplish other than putting a procedure in place for shameless virtue signaling? Giving to charity is powerful. Talking about giving to charity or telling people you will conditionally give to charity in the future, is transparently self-serving.

Public pre-commitment is a basic building block of human coordination. Criticizing it as "virtue-signaling" is facile.

Re: YC and Founders Pledge

#38

Post by splintercell »

imbenclifford wrote: post #33
BinaryIdiot wrote: post #8

I understand giving to charity is great and all but what about employees 10, 35, 97? So someone works hard at a start-up but they weren't among the first dozen or so to join then they likely get next to nothing from an exit. So how about, instead of a pledge to give to charity, founders pledge to give more equity to later employees so only a small handful are not the only ones to profit. Everyone takes a risk joining…

Ben from FP here. To be clear, founders aren't giving away equity - they are pledging a percentage of what they personally receive on exit. This doesn't reduce the equity that is available for other shareholders.

> To be clear, founders aren't giving away equity - they are pledging a percentage of what they personally receive on exit.

Which could be construed as equity for later employees.

Re: YC and Founders Pledge

#39

Post by avivo »

tlb wrote: post #26
avivo wrote: post #12

This is amazing. However, what we need even more is a pledge for e.g. responsible disruption . So companies could devote say 1% of their resources to modeling their effect on the world and compensating for (or designing away) the negative externalities they unintentionally impose. I know that is a much harder problem though, and I hope lessons from Founders Pledge can be applied toward it. Kudos to the team for putti…

This is an interesting idea. Are there good examples you could point to of analyses of externalities of a company? Other than an oil, or chemical company. For a pure software company, is the answer ever much different than the amount of electricity they use?

Definitely. Here's a small sample.

Craigslist unintentionally decimated newspaper revenue from classifieds. http://www.forbes.com/sites/jeffbercovici/2013/08/14/sorry-c...

Twitter unintentionally created opportunities for crazy levels of harassment that bleeds dangerously into the offline world. https://www.buzzfeed.com/charliewarzel/a-honeypot-for-asshol...

Facebook unintentionally created an industry of hyperpartisan factless discourse that may be fueling demagoguery worldwide. http://www.nytimes.com/2016/08/28/magazine/inside-facebooks-...

That's just off the top of my head, without getting into companies like Uber & AirBnB, or ad targeters, etc.

All of these companies provide incredible value, and I mostly prefer to live in a world with them than without them. But it would be great to see more effort put toward mitigation of their unintentional excesses (and to their credit, all three are trying at least a little in various ways).

Re: YC and Founders Pledge

#40

Post by etjossem »

mkagenius wrote: post #6
trevyn wrote: post #3

Are we to take away from this that founder charitable giving is more important than employee equity compensation in YC's eyes? Wouldn't make me want to work at a YC company.

> charitable giving is more important than employee equity compensation You are probably assuming that employees are definitely under compensated.. what about the case when founder owns only 5% and still wants to donate a part..

> what about the case when founder owns only 5% and still wants to donate a part..

Seems pretty atypical.

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