A different quality of capital and investor-company dynamic

 

The characteristics of steward-ownership-aligned financing – following the principles of steward-ownership – fundamentally challenge core mechanisms of the current investment world. This presents a different quality of capital, paving the way for a larger plurality of company models and investor relationships.

In steward-ownership-aligned financing, investors, founders and other stakeholders are aligning and structuring their interests and needs around the purpose and the development of the company. Ensuring the company develops in a way that fulfils its purpose and achieves success is just as important to investors as it is to entrepreneurs. Profitability and operating as a financially healthy business is absolutely crucial – but not as an end in itself or mainly for higher shareholder value but to work sustainably towards the company’s purpose in the long run, while also covering capital costs and providing adequate pay for the work put into the company. This stands in contrast to conventional equity investments, where the company’s orientation towards creating shareholder value is often – at least in the long run – dominating the purpose of the company.

As a result, steward-ownership-aligned financing allows for another quality of (risk) capital, relationships and roles that cater to a diverse range of companies. This includes startups like VYLD and Haferkater, which prioritize entrepreneurial independence and purpose over quick exit strategies, as well as companies like Patagonia, Bosch or Organically Grown Company seeking succession solutions aligned with their values – and thereby becomes part of the global growing movement and ecosystem of alternative and non-exit-oriented financing models.