TLDR: AIM won’t run another round of Founding to Give at this time, but we’d be excited for someone else to run (an amended version) of it 

AIM launched the Founding to Give program two years ago to incubate for-profit startups with the goal of creating (1) impact via donations and (2) directly through company activities. 

Since then, we have run 2 cohorts for which we had over 3,000 applications, selected 38 founders who all pledged 50% of their exit money to effective charities, and launched 24 startups. We’ve been positively surprised at the level of talent we’ve been able to recruit for a program including many repeat founders who have substantial technical expertise or have raised substantial funding in the past.  We have been incredibly impressed with the FTG founders, several of whom have gone on to be selected for top tier accelerators such as Entrepreneur First, Antler, YC, and Techstars. 

We think that FTG has shown multiple compelling theories of change, but the best versions of those ToCs would take us quite far outside of AIM’s main focus in the effective nonprofit space, and require substantially different models/talent profiles/connections relative to AIM’s current comparative advantages. As part of our overall strategy to focus more strongly on our core theory of change of incubating high-impact non-profits, AIM will therefore not be running another cohort of Founding to Give at this time. However, we’re actively scouting orgs/people who are well-positioned to run different versions of FTG that we believe to be impactful and cost-effective.

We’ve written more in-depth learnings here, which we hope will be useful for people who are either looking to launch impactful startups themselves, or those who are looking to do more for-profit incubation in the EA space. In the meantime, we wanted to share some headlines on which models we believe are promising and warrant further exploration. 

What are the most compelling versions of “for-profit impact incubation?”

Through the last two years, we’ve learned a lot about catalyzing for-profit impact. FTG has shown multiple different compelling models of for-profit impact incubation.  We think that each of these models would benefit from being more focused and purpose-built, rather than housed in one broad program like we ran for the past two cohorts. 

Vertical-specific incubators  

Through our work on the Founding to Give cohort, we’ve become much more bullish about incubating startups that are for-profit, have venture scale potential, can be funded through ‘regular’ commercial capital, and create significant impact directly. We wrote more about this here: Can for-profit companies create significant, direct impact? However, both from modeling the impact of existing companies and as well as new company ideas, we’ve found that they appear to exist mostly within a handful of verticals (biotech, health, emerging markets, climate, talent), specifically where profit incentives and commercial incentives overlap (for example, in countries with high levels of healthcare insurance, preventing (re-)hospitalisation is profitable). We think that vertical-specific incubators, running cohorts like “healthcare in India” or “accelerating clinical trials” would be the best format, and provide higher cofounder matchability than our broad program did, as well as stronger network connections to customers, advisors, and investors. For those considering building companies that create direct impact, we’ve written this resource to help find strong ideas.

Earn to give entrepreneurship 

Earn to give entrepreneurship can yield high donation potential, but the distribution of outcomes is heavily skewed given the hits-based nature of entrepreneurship. We’ve seen that skew and uncertainty go up even more in the last 2 years with AI drastically changing how software is built/valued and sending the VC industry in flux. We think this path is promising, but only for founders with high founder-market-fit for this path, who are building companies on the frontiers of AI.  We expect an optimized version of this program would include larger cohorts/scale (hundreds of companies per year), and be fully optimized for large exits (based in San Francisco, for example). We also think that someone who builds a program like this should be cognizant that the type of founder who would be a great fit for this path often has expensive counterfactuals, as well as being aware of other work being done in this space (e.g. by Founders Pledge, which services this target audience at a later stage of their growth journey). Our resources include a little tool to help founders compare founding a startup to donate versus working and donating in a more classic earn-to-give approach. 

Revenue-generating impact 

Through our research, we found quite a few ideas that were not exactly venture scale, but seemed like they could be revenue-generating/cost covering, and highly impactful (e.g. animal welfare tech that gives some commercial benefits to farmers). Since these would likely require philanthropic money to get started, we should hold these ideas to the same standard for impact as other high-impact non-profits such as those we incubate through our Charity Entrepreneurship program. AIM plans to explore some revenue-generating ideas in upcoming research rounds, and if we find ideas that are promising, support them through our regular Charity Entrepreneurship program. 

What’s next?

If you or someone you know might be interested in building, running, or funding a for-profit impact incubator in the areas we identified, please reach out at jacintha@charityentrepreneurship.com – we may be able to support them. We’re specifically interested in meeting builders/domain experts in biotech, healthtech, or emerging markets with previous founding experience who would consider running a vertical-specific incubator geared towards maximizing impact.

If you’re exploring for-profit entrepreneurship as a path to impact, you can find our learnings and resources here. High Impact Professionals is also hosting an impact accelerator program with an entrepreneurship track, which might be helpful for those looking for structured support. 

If you’re running accelerators or incubators that (also) does for profit incubation in the EA space, you can read more of our learnings here.

To finish

We wanted to extend a big thank you to the FTG founders, all the supporters we had on our journey, and the AIM community and team for building out Founding to Give.