Startups put stock in Colorado.

• Author: Cote, Mike
• Position: Entrepreneurs Foundation of Colorado - TechStars

Entrepreneurs plotting a new startup have plenty to wrestle with, from securing venture capital to ensuring they have the right team to transform their killer idea into a viable business.

Ryan Martens wants them to consider something else--giving part of the company away before it even makes a cent.

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Four years ago, the founder and chief technology officer of Boulder-based Rally Software introduced a "1 percent" club to the local entrepreneurial community to encourage emerging companies to embrace philanthropy. Now the idea has gained wider exposure through the newly minted Entrepreneurs Foundation of Colorado.

As of early April, five companies and the TechStars entrepreneurial program had signed on to participate with the group, which has secured about 1 percent of the first series of equity from the startups. The Entrepreneurs Foundation (efcolorado.org) also is receiving endowment capital from early investors.

Waiting until a company becomes successful is often too late to encourage charitable giving, organizers believe. Martens knows from experience.

"When we had an exit event or sold our company, that is not the point in time you're suddenly going to get philanthropic," the 20-year industry veteran said.

The group is working to set up an endowment for the Community Foundation Serving Boulder County, a nonprofit that has distributed $20 million in grants to local charitable and arts groups over its 15-year history.

"There is a lot of momentum and excitement from the entrepreneurs themselves," said Josie Heath, president of the Community Foundation. "Not only have they committed, they also have asked their employees and executives to contribute 1 percent of their earnings."

The Entrepreneurs Foundation of Colorado is affiliated with the San Francisco Bay-area based Entrepreneurs Foundation, a group that has contributed more than $5.6 million to community organizations since its inception nine years ago.

"At the end of the day, it's promoting the concept of corporate philanthropy and community involvement with emerging companies," said Executive Director Diane Solinger, a graduate of the University of Colorado.

Her group asks startups to also consider donating products or in-kind services. Charitable groups often lack office space, for example, she said.

Solinger said she has high hopes for the Boulder effort, in part because it's a smaller, more tight-knit community than the Bay Area.

"I think they're going about it...