[vessenes]

Chase,

I was an early donor and had forgotten about Watsi — thank you for the reminder and congratulations! You should be super proud. Plus, the experience you got here will serve you in good stead if you decide to do a commercial venture — scaling a non profit is much, much harder than a commercial company with some compounding finances.

That said, I have a pitch for you on Watsi - I continue to think Donor Advised Funds are underutilized financial tech in the US today. Watsi could set up a DAF that takes your cohort’s startup stock, gives them a tax deduction, mandates a 2-5% annual disbursement to the general fund if not otherwise allocated, and privilege the Watsi general fund. My team did a bunch of research on these a few years ago including some legal work, and I’d be happy to share if you think you might be interested in taking another crack at getting Watsi a large fund to back what it’s doing.

Either way - helping 33k people is incredible.

[chaseadam17]

I’m a fan of DAFs and agree they are underutilized. Getting ppl to donate stock might be hard but I’ll chat with Mackinnon, Watsi’s ED, about it and let you know if we have any questions. Appreciate the offer to help share research!

[vessenes]

Totally!

What you’ll hear from DAF folks is

“we have to sell everything we get in when we get it” -> not true, managed by disclosures

“Our job is managing volatility of the donated assets, so getting volatile assets would be bad for the fund, or possibly not allowed” -> not true, managed by disclosures

“DAFs are disliked because of asset stuffing, and on the down” -> true as to the first part. On and off legislative pushes centeraround getting 2-ish% a year as a mandatory donation, so you could be ahead of the curve on an ‘ethics’ basis with this as a rule.

“It’s impossible to value illiquid stock so we can’t get a proper deduction” -> not true, you can get an outside valuation, or see below on the secondaries

The scheme I’d suggest on a call would just be: find a friend who did well from your cohort, or pitch some of your VC allies that have helped on the board, see if anyone is willing to give it a try in the 10mm or so range. You’ll then need to find someone who wants this stock in the secondary market; this would be either the key partnership or the key staff you hire, and another reason to bring in the VCs here. You’d be able to accept any donor with stock that has a value in the secondary market.

One of the things we looked at was psychology on give now / give later, most founders are planning on mooning, and therefore want to give later. This lets them split the difference a little - deduction at current secondary prices, but they could hold off on selling and get more out to charity if the stock does well.

On valuation, to my mind the easiest path is finding a secondary buyer, then you’ve got an independent price.

We even ID’ed an Exec Director who wants to do this, and would be great! My contact is in my profile.

[corford]

I wonder if some sort of partnership with https://forgeglobal.com/ could potentially help for syndicating to secondary buyers?

[vessenes]

Nice idea! I didn't know about them, but yes, exactly