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  • Writer's pictureCam Anderson

Ideal Startup Part 2 - The nine crucial questions test

Updated: Feb 21, 2022

Every business idea can be assessed, so we continue here from last month's article 'An Ideal Business Startup for You?' to see if the new business has what it takes to make it or whether we stop immediately. Read on to see that we have a strong contender.

Recall that the business idea is to offer money capsules to fund contributors. Money capsules are like time capsules except rather than mementos from past times, money capsules contain up-to-date investments which grow to build funds for the future.

Here we address the nine great questions posed by Matt D'Angelo in his article: "9 Ways to know if you have a great business idea," published April 7th, 2020, by the Daily Business News.[i]

1. Does it solve a problem?

Yes, charities today know how to address most of their issues but face enormous financial obstacles to realize the changes they envision. Social issues are projected to worsen by $25 billion in Canada over the coming decade.[ii] Over time, a money capsule solution creates sustainable funding for charities, thus eliminating the lack of money problem for future social issues.

In addition, the money capsule service empowers any would-be donor to give far more money than they could afford today, albeit in the future. Anyone with a few dollars can eventually make a sizeable financial difference for the charity of their choice.

Because many consider Baby Boomers, the generation born between 1946-1964, as indulgent and obsessed with consumerism, Boomers may wish to offset this negative opinion by leaving a legacy donation.'[iii]

Canadian research shows legacy giving via wills peaks at age 68 and drops off after age 75.[iv] At the time of writing, Boomers range from 57 to 75 years old, indicating now is an excellent time to reach out to this demographic.

Large donors could also benefit. Significant donors can convert one-time gifts into repeated giving using a money capsule approach, multiplying their impact to their chosen causes.

2. Will people pay for it?

Yes. Major donors already incur costs to organize and maintain a personal private foundation, or alternatively a DAF within a foundation, to make a lasting difference. This is the proof we have that people will pay real money to leave a legacy.

However, money capsules face one extra hurdle. A money capsule contribution to charities does not reduce the donor's taxes, as our start-up is not a registered charity. Unfortunately, giving to a company that raises funds via investments does not qualify for tax credits.

Instead, money capsule marketing must emphasize that donors give for the cause, not tax benefits. A Federal report on top reasons that donors give put tax credits at only 26% (44% for the top 10%) vs a cause the donor believes in by 88% (97% for the top 10%).[v]

This donor motivation research suggests a significant portion of money capsule clients could forego the tax credit if adequately presented. If necessary, a donor could give the after-tax value as the seed fund gift as a fallback position. Since small seed money grows indefinitely, the overall impact of such a reduction is minor.[vi]

Consider this example. On the centre column, the donor makes a typical donation where all the money is given now, on the rightmost column shows the impact of the money capsule donor:

Donors who give to specific charities now direct their funds and the Government's portion to that charity. But donors who set aside a portion for the future get to magnify their donations over time, far beyond the tax savings. The money capsule donor has more than doubled the impact by year fifty, with much more still to come.

Recall also that money capsule donations are meant to be a minor part of overall giving. If the $5K was part of a $100K donation in the above example, the overall effective waiting time for the charity is reduced from 25 years to an equivalent of 1.25 years. Most charities would happily wait 15 months for a $100 K donation. Such a slight difference in average waiting time versus a huge impact makes giving to the future a viable choice.

3. What's your price point?

Revenues emanate from an approximately 1.5 % to 2.0 % levy for administration and investment management services.

This fee level is well in line with industry standards. For example, the Vancouver Foundation's fees are designed to recover actual costs, charging 0.70% Administrative 0.60%-0.80% Investment Management fees or approx. 1.3% to 1.5% overall on a fund exceeding a billion dollars. [vii]

As the investment fund expands, so do the revenues for money capsules, enabling lower costs per donor gift and building a competitive advantage. The donor and charities must see fees as reasonable and not subject to undue changes or overcharging.

4. Is there a sizable niche market for it?

Yes. Not only is there a sizeable niche, but also sizable sub-niches. The broadest niche is literally anyone wanting to leave a sizable legacy that empowers our future descendants.

We can spot niche subgroups based on specific charities/causes and refine further using demographics. For example, imagine a cause of providing free tuition for any successful applicant at a given university. The donor niche is most likely the universities alumni who feel gratitude for their education and want to give back to their alma mater.

Other niches include specific health issues, social justice, the environment, the arts, etc. Each group has passionate supporters willing to finance their cause significantly for the future.

Another prominent example niche is the living founders of private foundations or Donor Advised Funds. These individuals already envision a better future and could be very interested in new ways to help advance their programs. Large donors are a crucial early target to achieve a sustainable business size.

In dollar terms, the size of charitable donations in Canada currently extends from $9 to $12 billion per year.[viii] If money capsule services accumulated ten million dollars, the amount would equal one-thousandth of one year's giving.

5. Are you passionate enough about it?

Yes. I believe these services will contribute to humanity. I imagine that fulfilling donor dreams would excite passion in both the fundraiser and the donor. Knowing that every effort by the start-up empowers clients' dreams would be inspiring to all stakeholders. As stated earlier, I aspire to be a customer, and I am exceptionally passionate about that.

Dr. John Izzo's book 'The Purpose Revolution' recounts ample evidence of how employees are re-framing their everyday tasks into making the world a better place[ix]. The purpose revolution dramatically strengthens employee engagement in the workplace, instilling passion through purpose in every employee. Money capsules endow anyone and everyone with a sense of purpose and meaning to improve the world by supplying needed sustainable funding.

6. Have you tested your idea?

Yes. Ben Franklin proved the idea could be done. We also learn a great deal from the details of his program, expertly documented in the 2015 book "Benjamin Franklin and the Invention of Microfinance."[x] Franklin did not assemble contributions from others, as he self-financed his business. Compounding multiplied his investment over the two centuries.

Today's best test would propose money capsule services to several potential donors and measure the resulting seed funds. This type of test has not happened as the company and fulfillment process is not established.

A second-best test asks individuals hypothetically whether they would take advantage of such a service. This has been done informally with positive comments received.

7. Are you open to advice?

Yes. Constructing a solution in collaboration with others is a necessity. I can't visualize a path to success without satisfying the donor's and the foundation's specific needs.

All advice from supporters of the business start-up is beneficial to some degree. We all suffer from not knowing what we do not know. Over-confidence must be kept under control. We can learn from everyone: customers, employees, consultants, suppliers, investors, and regulators.

On the other hand, don't give in to nay-sayers.

8. How will you market your business?

A money capsule business must create and market trust. The service implementation, the board of directors and the business model should so clearly inspire trust that donors voluntarily tell their friends. Charitable foundations should be so inspired as to pitch to donors to start seed funding programs.

Emotions sell. Marketing tactics must tell stories that activate strong feelings in donors via online cause-focused programs or donor-centric legacy creation programs, targeting the niches mentioned above.

Money capsules are about balancing funding for today vs tomorrow. Today charitable funding cannot grow from investments as financial returns serve current needs. If only one percent of donations were invested for growth, the funding for charities of tomorrow could vastly improve. Marketing must communicate these truths.

9. Are you being realistic about your goals?

Yes. Business models can be deployed that radiate trust, inspiring donors to feel confident in the opportunity a money capsule service offers. Once such trust is achieved, everything is possible.

A critical goal is to achieve sustainability, which requires reaching a minimum level of managed assets. I calculate that the business is viable once seed fund levels exceed $50 million. This amount may appear quite challenging but keep in mind, Canadians donate $10 Billion each year to charitable causes.

Furthermore, I predict that money capsule services can also target retirement savings plans to meet the $50 Million target. Annual contributions to those plans were $71.1 billion in 2019[xi], and total monies in such pension plans are in the trillions.[xii]

This business idea scores well!

Based on the above positive answers (biased as I am) this looks like a good opportunity. Contact me if you are interested at

Humanity faces a vast and chronic shortage of funds when addressing social problems. Whether the solution takes one hundred years, two hundred years or more is not the issue; it is whether you believe this journey to better fund our society's future is worth starting now.

Photo by Towfiqu barbhuiya on Unsplash


[i] 9 Ways to Identify a Great Business Idea - [ii] Xposure Op-Ed infographic June2018-3 ( [iii] The Baby Boomers' Legacy ( [iv] Charitable+Giving+In+Canadian+Wills+By+CAGP+September+2020.pdf ( [v] Table 7 Reasons for donating to charitable and non-profit organizations, 2013 ( [vi] For example if the seed fund gift was to be $10,000 a client could simply give $5,000 which would be the after-tax savings equivalent. The impact would be a delay of one doubling or 14 years at 5%. When dealing in centuries this delay tends to be insignificant. [vii] Investment Overview.pdf ( [viii]The-Giving-Report-2021_EN (1).pdf see Figure 5 [ix] The Purpose Revolution: How Leaders Create Engagement and Competitive Advantage in an Age of Social Good eBook : Izzo, John B., Vanderwielen, Jeff: Kindle Store [x] Benjamin Franklin and the Invention of Microfinance (Financial History Book 14) eBook : Yenawine, Bruce H.: Kindle Store [xi] The Daily — Pension plans in Canada, as of January 1, 2020 ( [xii] Pension Funds in Figures - 2020 (

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