Proton is transitioning towards a non-profit structure

From the very beginning, Proton has always been a different type of organization. This was probably evident from the way in which we got started via a public crowdfunding campaign that saw 10,000 people donate over $500,000 to launch development. As a company created by scientists who met at CERN and that, to this day, remains run by scientists, Proton has never been led by people who are driven by the maximization of profit. What has always mattered most is impact, led by a deeply held belief that people must come before profits.

Proton’s mission has always been unique. Most companies are created to be sold, and they achieve that by placing profit above all other considerations. For most businesses providing “services” to the masses, the easiest way to profit has been to misuse user data and engage in surveillance capitalism to the detriment of society and democracy. At Proton, we have intentionally taken a different path to achieve a more difficult mission. We want to remake the internet in a way that is private by default and serves the interests of all of society, not just the interests of a few Silicon Valley tech giants. In short, we want to create an internet that is able and willing to defend freedom, no matter the cost.

For exactly 10 years, we have done this, as today marks the 10th anniversary of the initial Proton Mail crowdfunding campaign in 2014. Our journey has not been an easy one, but thanks to the support of all of you, we have persevered and thrived despite all the obstacles thrown in our way. For this reason, community is the most important thing to us, and we want to ensure that Proton continues to faithfully serve the community for the next 10 years and beyond. To achieve this goal, I, as Proton’s founder, joined together by Jason Stockman (Proton’s co-founder) and Dingchao Lu (Proton’s first employee), have jointly endowed the non-profit Proton Foundation through a donation of Proton shares. These transfers and commitments from the foundation founders make the Proton Foundation the primary shareholder of Proton and make irrevocable our wish that Proton remains in perpetuity an organization that places people ahead of profits.

Why a non-profit foundation?

The fact that Proton was not previously a non-profit has certainly not prevented us from supporting our beliefs. In the past five years, Proton has given grants worth more than 2.7 million dollars to advance online freedom and democracy around the world. Organizations that have been funded include the Tor Project, the European Digital Rights network, GrapheneOS, and many others. In the world of open source, we continue to develop and freely license some of the most widely used encryption libraries, such as OpenPGPjs(new window), in a bid to make end-to-end encryption more widely available. Proton also continues to fund and operate services that can never be profitable, such as the Proton VPN projects to maintain free and open internet in countries like Iran and Russia, work that was featured on the front page of the New York Times(new window).

However, adopting a Swiss non-profit structure provides additional security, which a corporation cannot achieve. Because Proton has no venture capital investors, we can take this additional step to secure the future. Swiss foundations do not have shareholders, so Proton will no longer be dependent upon the goodwill of any particular person or group of persons. Instead, Swiss foundations and their board of trustees are legally obligated to act in accordance with the purpose for which they were established, which, in this case, is to defend Proton’s original mission. As the largest voting shareholder of Proton, no change of control can occur without the consent of the foundation, allowing it to block hostile takeovers of Proton, thereby ensuring permanent adherence to the mission.

In addition to its governance role, the Proton Foundation will also be consolidating, continuing, and expanding our existing grant-giving efforts to support organizations that are aligned with our mission to defend online and offline freedom around the world. To support this work, Proton is pledging 1% of our net revenues to the foundation when conditions allow, further committing the financial success of Proton to the public good. Finally, the Proton Foundation will also be an investor active in supporting companies and technologies that advance our vision of a free and open internet. In pursuing these activities, the foundation will not act like a traditional venture capital investor. We have no fiduciary duty to deliver a financial return – our success will be measured instead by impact.

A structure for sustainable change

While comparisons may be drawn to the non-profit Signal Foundation or Mozilla Foundation, the Proton Foundation seeks to tread a different path. We believe that if we want to bring about large-scale change, Proton can’t be billionaire-subsidized (like Signal), Google-subsidized (like Mozilla), government-subsidized (like Tor), donation-subsidized (like Wikipedia), or even speculation-subsidized (like the plethora of crypto “foundations”). Instead, Proton must have a profitable and healthy business at its core. For this reason, our services will continue to be offered through the for-profit Swiss corporation Proton AG, which now operates under the supervision of the non-profit foundation, which is its primary shareholder. This change in governance does not signal a shift in how our core businesses are run. Proton is not profit-driven, but we still must retain profitability as a core objective because a cornerstone of safeguarding Proton’s mission is independence through self-sustainability.

As with much of what we do, this approach is unique, but we believe this hybrid model offers the best of both worlds. For instance, the for-profit corporation is not prevented from issuing stock options to attract and incentivize the best talent in tech. Nor would it even prevent the corporation from raising capital on public markets if additional resources are required to win the fight for the future of the internet. However, the foundation’s control would always require the company to act in a way that does not jeopardize Proton’s original mission, and Proton’s financial success is directly committed to the public good. In this way, we seek to preserve not only Proton’s values, but also our culture of innovation, entrepreneurship, and ambition, and our relentless competitive spirit.

The next 10 years and beyond

In the past 10 years, we have launched five services and reached 100 million people. In the process, we have also grown from a team of 3 to a team of 500. But we have not gone far enough or fast enough towards achieving our vision. In the next 10 years, we will work harder, ship faster, and make bigger and bolder bets because in seeking to upend the status quo, sometimes the biggest risk is not taking risk. We enter our second decade hopefully wiser, learning from mistakes and having a better appreciation of the challenges ahead. But most importantly, we remain just as committed to keeping our promises to you.

We believe the change to a non-profit structure is right for the community and allows us to pay your support forward by ensuring that Proton’s mission continues to be protected into the future. We want to thank you for your trust and support for Proton’s mission, from our initial crowdfunding days to the present and into the brighter future we are building together.

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