FAQ - Upside Foundation of Canada

Frequently asked questions

  • How does The Upside Foundation work with member companies?Open or Close
    The Upside Foundation receives pledges of stock options or warrants from private companies. When the company has a liquidity event (e.g.,  IPO, acquisition), the Foundation sells its options or warrants for cash and donates the proceeds to registered Canadian charities. The Foundation has no involvement in the companies’ operations. While not its focus, The Upside Foundation also accepts cash donations to fund operations.

  • Who decides when to convert the stock options to cash?Open or Close
    Upon a liquidity event, the Upside Foundation’s Board will decide when to convert the options or warrants the Fund has been granted and when to sell the shares. Generally, these options, warrants and shares will be liquidated at the earliest possible opportunity, in order to provide cash allocations to the charity organizations.

  • Is my company too early for The Upside Foundation?Open or Close

    If you’re already referring to ‘your company’, no. The Upside Foundation is intended for small and growing companies. The earlier you join, the sooner you can start taking advantage of the benefits of being a part of this national growing movement and connecting with our network. Some companies have even taken the first step to join (filling out the online pledge form) before they are officially incorporated. You do not need to have an Employee Stock Option Plan in place.  There is no cash impact on member companies as a result of the pledge.

  • Is my company too late for The Upside Foundation?Open or Close

    All Canadian private high-growth companies are encouraged to join The Upside Foundation.  Companies have joined after receiving multiple rounds of funding worth millions of dollars.  There are ways we can structure your donation to make it make sense given the complexities of mature organizations.  As long as your company is still private, you can join the Upside Foundation.

  • What kinds of companies join The Upside Foundation?Open or Close

    Any company that is based in Canada and has high growth plans can join the Upside Foundation.  Many of our companies are tech-focused, but not all.  We welcome companies from all industries.

  • How does my company contribute stock options to The Upside Foundation?Open or Close

    The process is very simple. To get started, just fill out our online pledge form on our website and we will be in touch.  No lawyers or accountants are required for the first step as you are simply pledging the options.  The aim is to keep the process as simple as possible. However, options and grants require a legal process, so the Foundation has created customized forms for this purpose. Once the pledge form is received you will receive detailed instructions on how to contribute from an ESOP (employee stock ownership plan) or a sample legal form that can be used to complete the process.

    For more information on the legal donation process, please review our Resources section (under the About Us tab).

  • How much do companies donate?Open or Close

    The number of options varies with every company, but it is typically around 1% of the outstanding shares for early stage companies. Companies that join at a later stage typically donate a smaller portion. While no minimum number of options is officially required, in order to make a significant impact upon a liquidity event, we request that you donate a meaningful amount of stock options so that the resulting funds can make a difference.

     

  • Do companies make additional pledges of options to The Upside Foundation to maintain the 1%?Open or Close

    Companies are not required to make additional contributions, though several companies working with our global partners have generously done so in order to minimize dilution following subsequent financing rounds.

  • What happens if a member company goes out of business?Open or Close

    These stock options will be worthless and will not be exercised.  However, as an entrepreneur, you will have hopefully benefited from the Upside Foundation community and built up your own network.  We hope you will consider making a grant from your next, more successful, venture as well.

  • Who has already supported the Upside Foundation?Open or Close

    For a list of our member companies to date who have shared their upside, see our List of Members. In addition to member companies, the Upside Foundation is supported by a committed group of Founders, Board Members and Advisors who are all volunteering their time, in addition to one full-time Foundation Manager- see our List of Board Directors, Advisors and Managers.  Many prominent Canadian investors, incubators and community organizations have demonstrated their support for the Upside Foundation- see our List of Community Partners. The Upside Foundation has secured various firms and individuals to provide pro-bono services and financial support- see our List of Supporters.

  • How are the charities selected?Open or Close

    The company who is having the exit selects the charity that will receive the resulting funds.  The Upside Foundation wants the charity allocation to be very meaningful to the member company.  Some companies select the charity or cause they will be supporting up front; others wait until a liquidity event is imminent to decide.  Many companies already have specific charities in mind, while others will solicit support from the Foundation to conduct research on charities that address their chosen cause.  Our goal is to tie the giving back to the community.  Any charity suggested by a member must receive Foundation Board approval and pass the Foundation’s due diligence process which includes, but is not limited to, the charity being Canadian, in good standing with the Canada Revenue Agency and unaffiliated with a political or religious cause.

  • How can a charity get involved with the Foundation?Open or Close
    Given that the charities are selected by the member companies, we recommend that charities work to build their reputation with leaders in the entrepreneurial / tech innovation / startup communities.  Many charities leverage the Upside Foundation platform as a way to engage entrepreneurs and support long-term giving strategies.  We are more than happy to support any charity’s initiative to engage entrepreneurs in committing an equity donation in support of their organization.  Feel free to reach out to learn more about how you can leverage our platform.

  • How is the Upside Foundation funded?Open or Close
    We receive private grants that cover our operational expenditures.  See our Founding Donors for a listing of those who have generously supported us.  We are also the recipient of a major grant from The J.W. McConnell Family Foundation.  100% of donations from member companies are directed to chosen charities.  While companies are not required to donate to the Upside Foundation, companies are welcome to consider the Upside Foundation as one of the recipients of their final donation.