Pledge Ventures: A future full of promise

I’m delighted to be able to share that at the end of December 2023, Founders Pledge received its first donation from its partner fund, Pledge Ventures.

At $150,000, this is cause to celebrate, not just because of the impact the money will have in the short term (try our ROI - return on impact - calculator to see what that looks like!) but because the donation represents a huge step towards realizing the transformational potential of this new model!

Pledge Ventures was created as a new economic engine to help power the charitable work of Founders Pledge. Working in partnership with the charity, this innovative new venture fund uses a rules-based approach to invest exclusively in growth stage companies where a founder or leadership team member has pledged to give back through Founders Pledge. Pledge Ventures has a key difference which we believe makes it unique; rather than a General Partner (GP) running the fund and walking away with the majority of the profits if it does well, this fund donates up to 50% of the annual management fees and - much more importantly - 85% of its carried interest to Founders Pledge.

This could be a game-changer. While Founders Pledge already benefits from the generous support of members - as well as a number of other incredible donors - for the first time, Founders Pledge will be able to participate vicariously in the success of its members’ companies as they scale, with the added bonus of Pledge Ventures providing funding to these companies at an exciting stage in their trajectory. There’s a lot to like here!

When I wrote about the first close of Pledge Ventures in April, we were still in the nascent stages of turning this idea into a reality. Since then, Pledge Ventures has made significant leaps forward, and has made investments in seven (very cool!) Founders Pledge member companies, with a number of other exciting opportunities in the pipeline. We couldn’t be more pleased that Pledge Ventures is on the journey with Wasoko, Ochre Bio, Blockchain.com, Recogni, Replicate, Healx and Unbabel, and can’t wait to see this list grow in the coming months.

Crucially, what the last months have demonstrated is that we are on track to make this work. Pledge Ventures has successfully raised a fund - with $44.5 million closed to date - in some of the most challenging economic conditions our sector has seen this century, is deploying capital into hot companies in funding rounds that very few people get access to, investing alongside the likes of a16z, Sequoia, YCombinator, Atomico, Headline, and Google Ventures, and doing all of this in a responsible way that aligns incentives to those of Founders Pledge and our philanthropic community.

This is clearly all great progress, but it’s only the start of the future we see for this partnership. While the opportunity Pledge Ventures presents is huge, the true potential of this partnership is still a number of years away from being realized. As anyone who has ever taken a look at a venture fund’s financials will tell you, when you do well, carried interest is a heck of a lot more meaningful than management fees - when the fund starts to see investment returns, things could get really interesting!

For now, this donation represents a lot more than narrowing a fundraising gap. It symbolizes the first step towards a future in which Founders Pledge - and maybe even other charities too - can support themselves in a fundamentally different way. Pledge Ventures is laying the foundation for a new type of VC, one that combines profit and purpose harmoniously and has impact baked into its core.

This donation represents a future that I’m pretty excited about.