Tmura’s creation of the altrupreneur has provided startup founders with a means of mentioning the term nonprofit without causing their investors to cringe
Any entrepreneur/startup founder will tell you that to disrupt a market, you have to understand it first.
One group is championing this concept for a new kind of altrupreneur by applying the same logic to the charity and nonprofit sectors. A cursory glance at this group’s track record and one realizes right away that they’re pretty good at it too.
Plenty of nonprofit to go around
Tmura, the Israeli Public Service Venture Fund, announced today that it has broken the $10M mark in funds raised for nonprofit causes, mostly directed toward youth-related charities throughout Israel and exclusively sourced from startup donors. How’d they do it?
The brainchild of Yadin Kaufmann – Founding Partner at Veritas Venture Partners, Tmura offers startups a way to donate to charities and nonprofit causes in a way they can relate to. Specifically, they ask startup founders to gift them equity in their fledgling companies, usually in amounts ranging from 0.5% to 1% of its early stage value.
Tmura turns that equity into a profit by liquidating bequeathed shares after a donor startup completes a successful exit, either by way of private buyout or IPO.
“Tmura has provided tremendous support for education and youth-related charities in Israel through its partnerships with high-tech companies,” said Shir Segal Shamshtein, GM of Borderfree’s site in Israel. “Borderfree is honored to be able to support Tmura in its mission to create change and offer opportunities for youth throughout Israel.”
Borderfree is a cross-border ecommerce payment solution that joined Tmura back in 2004 but only IPO’d back in March of this year, so you can see Tmura’s playing the long game (as well as the long shot game) with its strategy.
However, like any successful fund portfolio makeup is key, and when it comes to a fund that invests nothing but operating expenses, quantity is just as valuable as quality in fund makeup, if not more so.
So it’s not surprising that Borderfree is only one of 360 other contributing companies that number among Tmura’s donors. All this equity will eventually go to funding 100+ non-profit organizations, should the donor startups make it out of the rat race with an exit.
Good companies are good at exiting
In this respect, perhaps contributing to Tmura is not all about selfless sacrifice as 53 of its 360 companies have thus far exited and contributed to the total $10M Tmura has earned, with PrimeSense, Somoto, Soluto, and KitLocate being the most recent examples along with Borderfree.
Forget about the moral optics of stacking up an altruist against a strictly-for-profit VC firm: 53 0f 360 is a success ratio that puts most other investment funds to shame on performance alone.