Ricky Spero is co-founder and VP of Product Development at Rheomics, developing a next-gen blood coagulation diagnostic.
Last saturday, I went to the Startup Giveback. Local startups Coursefork and Shoeboxed had arranged a corn hole tournament and hooked us up with donated Fullsteam Beer and BBQ from The Pit. But for an event about giving, I was struck by how little of the conversation was actually about giving. Which got me thinking, what should we have been talking about?
Here’s a suggestion: let’s talk about what happens after the exit event.
What happens if your company is a hit? Maybe you go and buy a new car (or jet—depends on the size of the hit). Or start a charity and do some angel investing. Maybe you run for Governor or endow a university. Maybe you build an underground bunker, buy a lot of stuff, and sit on it all day, waiting for dwarves.
In the Valley, the tradition is that you pay it forward by rolling some dollars into angel investments. We’re early enough in this 20-year project that there’s not a yet a set of cultural norms for what you’re supposed to do when your company hits it big. But there will be, and this is the time when we set expectations.
Which brings us to my ask. At the next Social, try this on as a conversation starter: “If your company is a hit, what would you do with all that money?”
Fun conversation, right? But I’ve found it’s a really difficult question to answer with any clarity or depth. Which brings us to the follow-up. Say my wife and I are having a nightcap with a side of daydreaming, and I say I want to start a charity.
The first followup is, Why?
The second followup is, How would it work?
Notice what questions I’m avoiding. I don’t care “how much.” In the daydream, it’s always a big number. In real life, it’s whatever we can afford. But why and how are really hard to pin down. They lead into a maze of questions.
People have all kinds of motivations for giving: helping the poor, supporting up-and-comers, expanding possibilities for future generations, thanking people who helped you get where you are. Which ones should we prioritize?
Even more interesting is the mechanism people chose to fulfill those goals. You can give money away. You can buy stuff for people that need them. You can invent technology that will alleviate a problem that’s insurmountable today. Do you focus on your own community, or find a community in the greatest need? Does it matter who knows what you gave?
And by the way, are any mechanisms out of bounds? Most of us probably agree that for-profit companies can be a mechanism for giving back. But what about putting your name on a university building? What about running a self-funded campaign for political office? What about opening a lobbying office in Washington?
I should be clear: these are questions that I haven’t fully answered for myself. But it feels like the right time to start talking about what we value. Partly, because one day you might have an exit event that opens the door to big-time giving. But also because the more you understand about the impact you want to have, the sooner you’ll see that you don’t need an exit event to get started.
So how about it? If you went public, what would you do with all that money?
Why? And how?