Return for Investors: How much is enough?

 

Of course, investors expect to receive their initial investment back, along with a suitable return – provided the company is successful. This also holds true in steward-ownership-aligned financing, with one key difference: the principle of purpose-orientation reshapes how returns are structured, demanding limits on economic claims in terms of duration, amount, or influence.

This principle ensures that the company’s value primarily serves its mission, rather than being maximized for external financial gain – whether it be for personal gain, on behalf of investors or other financially participating parties. At the same time, it allows for fair compensation to all stakeholders for their contributions, including investors. Whereas in conventional (equity) investment structures returns are typically uncapped, steward-ownership imposes some form of limitation on returns, thus counteracting the maxim of making as much profit as possible by optimizing the company towards that goal. The discussion therefore evolves from “How much can we make?” to “What is enough? What is a risk-adequate return for the investment? What is a fair compensation for the investor’s contribution?”.

We will dive more into different forms of limitations here.