Last year, the founder of a charity that is focused on making sure everyone on earth has clean water and a co-founder of an e-commerce mattress company met for lunch at a SoHo restaurant.
As the two ate, the talk inevitably turned to start-ups.
“How come at a start-up you can participate in the equity upside?” Neil Parikh, the co-founder of the mattress company, Casper, said in recalling the conversation with Scott Harrison, the founder of Charity: water. “But at a charity, you’re helping all these people, and you can’t participate in the monetary upside?”
It was a quandary that Mr. Harrison, who has forged close ties with the Silicon Valley elite over the years, had been mulling for some time. Now he is doing something about it. Under a new program, start-up founders will be able to share their wealth, not just with impoverished families in the developing world but also with a rather more comfortable demographic – Charity: water employees.
Here’s how it works: Entrepreneurs who own sizable stakes in private companies can donate some of their equity to Charity: water. When their company goes public or is sold, some of the proceeds will be paid out as bonuses to Mr. Harrison’s staff.