A Brief History of “Steward-Ownership Aligned Financing”
Steward-ownership-aligned financing didn’t emerge in a vacuum; it developed out of a need to fund companies committed to steward-ownership. This sub-chapter provides a brief insight into the journey of steward-ownership-aligned financing.
Steward-ownership-aligned financing was born from the very conversations that steward-ownership inspires. While it was clear from the beginning that the steward-ownership principles would deeply influence the kind of capital needed, the type of investments that genuinely support steward-owned companies wasn’t immediately apparent.
When we first started supporting companies transition to steward-ownership in 2016, one question quickly became clear: How do we finance these companies? If we want to see more steward-owned businesses in the world, we also have to think about where the capital would come from and what kinds of investment models could foster them. But this understanding doesn’t emerge from theory alone; it requires trial and error, hands-on experience, and learning from others. We realized steward-ownership needs steward-ownership-aligned financing, and steward-ownership-aligned financing only grows if people, funds, and investors are willing to take that path. So we set out to learn by doing—and to show that it’s possible. Our goal was to help build the field, making it easier for others to follow and expand the path toward steward-ownership-aligned financing. That led us to found Purpose Ventures (in 2017) and Purpose Evergreen Capital (in 2018): two investment funds dedicated exclusively to steward-owned companies – one focused on startups, the other on more established businesses. Our approach was grounded in learning by doing. We invested alongside co-investors to explore and learn, in practice, how structures for steward-ownership-aligned financing could look like.
Inspiration also came from social innovators – entrepreneurs and investors who were already experimenting with and applying solutions aligned with steward-ownership. After all, steward-ownership was already a lived practice when we started. Many of the tools and structures we explored had long been in use, especially among mid-sized companies in more traditional settings. In the startup finance world, however, these approaches were still relatively rare. Efforts of Purpose Ventures and Purpose Evergreen Capital (PEC), together with contributions from companies, investors, lawyers, tax advisors, and the network of angel investors, family offices, high-net-worth individuals, and institutional investors involved in numerous financing decisions, laid the foundation of our understanding – continues to shape the field today. This groundwork back then was further enriched with the work of the Purpose Foundation around the Veto Share and different solutions for steward-ownership, adding more perspectives and practical solutions to the evolving steward-ownership landscape. Interactions with other movements or individuals in the growing ecosystem of alternative financing solutions, like Zebras Unite, Transform Finance, or alternative financing expert Aunnie Patton Power, added further depth to these conversations, offering new ideas, perspectives, and nuances. These exchanges influenced not only the evolving understanding of steward-ownership-aligned financing but also how it is practiced today. And as a promising yet still developing field, they all will undoubtedly continue to do so.
Still, what quickly became evident is that steward-owned companies are far from “one-size-fits-all.” Instead, they reflect the diversity of a thriving ecosystem, much like permaculture: a system rich in variety rather than a uniform monoculture. Each company has its own mission, business model, market environment, stewards in the company, life stage, funding history and investors – all of which influence its financing approach. These differences shape their distinct approaches to financing, creating unique “flavours” of steward-ownership- aligned financing. Yet, despite their diversity and different approaches to aligned financing, they share a core foundation: their financing solutions are (or strive to be) deeply rooted in the principles of steward-ownership.
As you further dive into this guide, we’ll walk you through the essential elements of steward-ownership-aligned financing, clarifying what it is while highlighting the flexibility within. We’ll cover the core concepts but also leave space for you to explore, innovate, and maybe even become the next trailblazer in steward-ownership-aligned financing, because what you will also learn in the next chapter is that steward-ownership-aligned financing is still a field in movement.
And keep in mind: Some of what you’ll read here may be relevant beyond steward-ownership-aligned financing – others might already be applying similar methods!