The company’s founders this week presented the Entrepreneur’s Foundation of Colorado a check for $587,155, the share of founding equity that Gnip pledged to the foundation years ago. The amount is an estimate based on a combination of cash and Twitter stock that the foundation received as part of the deal. The foundation must wait six months before cashing in the Twitter stock.
The Entrepreneur’s Foundation of Colorado was set up by local businesses and is run by the Boulder-based Community Foundation. Startups pledge 1 percent of their early equity or annual profits to EFCO, which in turn distributes funds to the startup’s nonprofit of choice. It’s a way for a startup to give back to the community once it is acquired or goes public.
Gnip’s donation was 1 percent of Series A equity, meaning the $587,155 doesn’t equate to 1 percent of the sale price to Twitter since EFCO’s stake gets diluted by subsequent investment rounds. But it’s a huge boon for EFCO and nonprofits.
“It’s huge,” Morgan McMillan, executive director of EFCO, said of the Gnip donation. “It’s a really big impact on the community. A big win for everybody.”
Sixty-four companies have pledged equity to EFCO since its founding in 2008. Gnip – which collects real-time data from social media and sells it to clients seeking insights from it – is the seventh to provide the foundation with a payday.
Gnip’s contribution is the second-largest for EFCO. After Rally Software Development Corp. had its initial public offering last year, EFCO was able to cash in $1.4 million in Rally stock to distribute.
Gnip is designating 90 percent of its donation to the Community Trust, a fund of the Community Foundation that gives grants to nonprofits serving Boulder County residents. The other 10 percent will go toward EFCO’s operating fund to help grow the program.
Others have donated to various causes. Good April, an out-of-state company acquired at the end of its participation in the TechStars accelerator last year, designated its EFCO funds to go toward Boulder County flood relief.
“This is an easy way for companies to recognize the role community plays in helping you build a successful business,” McMillan said.