Giving Back: The “Upside” of Canadian Business

DSC9951 1024x683

There’s plenty in the news about the success of Canadian startups, particularly Canada’s tech startups which are said to be having a moment”, with more and more Silicon Valley VCs flocking to Canada to fund our homegrown startups.

There’s no doubt that our startup ecosystem deserves recognition — we’re seeing an onslaught of new Canadian companies contribute to our economy in more ways than one.

Adjacent to Canada’s tech moment” is a growing charitable foundation, which is actively targeting our startup ecosystem and the investors who’re funding it. The Upside Foundation of Canada offers another vehicle to give back to the communities these companies do business in.

The Upside Foundation is the brainchild of Rob Antoniades (General Partner and Co-Founder, Information Venture Partners) Mark Skapinker (Co-Founder and General Partner, Brightspark Ventures) and Janie Goldstein (Executive Director and Co-Founder, Upside Foundation) a charitable cause started by VCs.

Antoniades explains the story behind the evolution of The Upside Foundation, starting back when he got to know the person now running the CSR program at Google.

Before that, they ran an organization in California called The Entrepreneur’s Foundation. The Entrepreneur’s Foundation did three things that were quite interesting. They developed CSR programs for corporations, they organized events for the startup community, and they had this little project inside that took peoples’ or companies’ options, created a fund out of those options, and then when they were liquidity events, they would distribute those funds to various causes and they would keep some of that money.”

Likewise, Brightspark’s Skapinker had worked with an organization called Tmura in Israel. Tmura offers a similar model (to The Entrepreneur’s Foundation), and is funded by the VC community. Tmura works with VCs to get their companies to donate, and then the proceeds from those donations go back into the community. It was these two different experiences that brought together Antoniades and Skapinker (who brought along Goldstein) and formed the Upside Foundation.

There’s a couple of differences between The Entrepreneur’s Foundation in the United States and The Upside Foundation in Canada, Antoniades acknowledged, though they both operate in similar ways.

The people who donate the options are the ones who should determine where the money goes. So, the entrepreneurs or the companies that they work for, we really want them to own that decision. It’s important to them that they have a say,” says Antoniades.

The foundation also has some rules which capture the spirit of the initiative.

The money has to stay in Canada,” Antoniades says, explaining that the charity can take on any form – even a local soup kitchen – so long that it resides domestically.

The donation has to be going to a charity in good standing with the CRA. Finally, it has to be unaffiliated. So, it can’t be a specific religious institution, it can’t be a specific political party, it has to reflect Canada. Beyond that, then the entrepreneur or the company or however they want to structure this, those are the people that decide.”

One of the interesting features of Upside is that the company or entrepreneur has the option of changing the receiving charity. In the event that something more important comes along, you can change your mind. It is only finalized at the time of the actual distribution.

So, what’s in it for your portfolio companies? Joining Upside enables companies to embed social responsibility into their brand at an early stage, and enables them to join a national community of founders, investors and influencers who share their values.

Seeing the Benefits of Giving Back

There have been three exits that have seen proceeds flow through The Upside Foundation and into charities since 2013. Its first exit was Understoodit, which was acquired by EventMobi in 2013, and donated its equity proceeds to the East York Learning Experience and Mentoring Junior Kids Organization.

BlueCat’s $400 million exit also saw a portion of CEO Michael Harris’ stock options go to the to the Enbridge Ride to Conquer Cancer benefiting the Princess Margaret Cancer Centre. Upside’s most recent exit was Ooka Island, which was acquired by Scholastic in April 2017. Ooka Island donated the proceeds to the PEI Literacy Alliance, a charity that works to advance literacy across Prince Edward Island through the delivery of free supports, services and programs.

Some of the notable companies that have pledged to give back through Upside include Hubba, Wattpad, Wealthsimple, Zoom​.ai, Nudge,ai, Bluecat, Q4, Alongside, Tribalscale,Overbond and Sensibill.

The Upside Foundation is hoping the process of donating options becomes standard when starting a company in the near future.

Upside recently embarked on a Canada 150 campaign called 150×150. With an ambitious goal to double their membership in 2017; the tech community rallied around Upside to spread the word, and 150 companies pledged to give back in honour of Canada’s 150th birthday.

I think it’s the only charity built by VCs, run by VCs, for the VC community. The long-term vision is to include private equity. There’s no reason the private equity community can’t be part of this,” stresses Antoniades.

I think that’s an important statement to make as an industry. We’re going to get behind this initiative because it’s important that we change the way business is done in Canada.”

VCs who like what The Upside Foundation is doing are invited to share the concept with their portfolio companies. Those who are interested in learning more or getting involved, you can contact info@​upsidefoundation.​ca

If you would like to submit an idea for content, contribute to an article, or are interested in submitting an op-ed, contact CVCA’s editorial department here.