Using M&A Deal Escrows to Support Non-Profits
SRS Acquiom and Pledge 1% have teamed up to created EscrowUP by SRS Acquiom . As investors in SRS Acquiom and members of Pledge 1%, we are excited about the creative idea the two organizations have come up with to increase charitable giving as a result of merger transactions. When one company buys another, a portion of the proceeds (usually between 10% and 20% of the deal) goes into an escrow account for a period of time (usually a year or two). This escrow is used to cover any undisclosed or agreed to liabilities that come up for this period of time after the transaction. One of the shareholders, called a shareholder rep, is responsible for managing all the activity on the sellers side. It’s a thankless task and a number of years ago my partner Jason Mendelson helped create SRS Acquiom to address this . Instead of a VC, board member, or founder being the shareholder rep (and doing what can turn into a lot of work for free), you can now outsource this to SRS Acquiom. ...