The Presumed Abundance Clause
We want to create a new model for investors and entrepreneurs. We have been angel investors for a long time, and believe in getting a financial return on our investments, as well as a socially rewarding one. We know it is unrealistic to expect traditional investors to give up 100% of their equity, but we do see an opportunity and a need for a more collaborative approach.
In our ideal world, all contracts will contain a Presumed Abundance clause, in which the investor and the investee mutually agree to set aside a small piece of equity to create a new vehicle for good.
Whether you are an investor or an entrepreneur, you can make this happen. It starts with a personal commitment to set aside 1% of your equity to pay forward to future entrepreneurs.* Honor this commitment no matter what. When you begin negotiating, say that you have done this, and ask the other side to do the same. If 1% represents a much larger portion of equity for one side or the other, offer to set aside equally proportionate amounts.
Perhaps this will not remove all the friction inherent in any financial negotiation, but we believe that even this small act will foster a more cooperative, long-term way of thinking.
Replicate Our Model
If you are more philanthropically minded and would like to contribute to our fund, we have a better alternative: build your own.
We will help you. We've done all the legwork to enable you to set up your own fund. We can outline the fund structure, walk you through the necessary legal documents, and explain the tax advantages. We can even find someone to source and screen your investments. From a simple phone call to travelling to meet you in person, we are available to answer your questions. Just contact us and we'll do whatever is needed to make it happen.
We believe that the more people that follow the Presumed Abundance model, the more successful it will be. It's inherently scaleable. It's an economic growth engine. Over time, a single investment can capitalize countless others.
But perhaps the best reasons to do this yourself? It's rewarding and fun.
* We understand that some investors have fiduciary responsibilities that prevent them from being able to do this. We look forward to a new wave of VC firms and Angel Groups that have the Presumed Abundance clause built into every contract.