VYLD

Re-vylding the world: Growing as sustainably as their sewaeed with steward ownership

 

In a nutshell

Founded in 2021, VYLD is a German profit-forpurpose startup seeking to empower menstruators around the world while at the same time supporting radical sustainability. With a vision to create a positive impact on the environment and improve menstrual care, VYLD embarked on a mission to produce the world’s first tampon made out of seaweed: radically sustainable, fair, healthy and degradable in water and on land (the “Kelpon”).

Looking for a way to set up a company structure aligned with their values, vision and their concept of entrepreneurship, Ines Schiller and Melanie Schichan of VYLD discovered the concept of steward ownership. They didn’t want to build up VYLD and then make an exit, but focus on their business model and mission in the long run. The question of ownership, power distribution and how to set up a financing structure reflective of the company they wanted to build was central for Ines and Melanie. To them, steward ownership was a way to legally enshrine what they wanted to build from the beginning on – and also to credibly communicate it to potential investors.

From the beginning on, they strategically built their financing structure to facilitate a transition into steward ownership later on, integrating a group of investors as well as a crowdfunding campaign in their financing model. In their second financing round, VYLD collaborated closely with its investors to successfully convert the financing instrument into one that better suited their needs: from subordinated loans into a “Future Profit Partnership Agreement” (FPPA) based on profit participation certificates. With the implementation of this new financial instrument, although not selling shares, the investments are still categorized as equity, allowing VYLD to qualify for subsidies and bank loans. 

With a firm commitment to steward ownership from the very beginning and their non-exit-oriented financing structure in place, VYLD was able to transition into steward ownership in late 2022 using a golden share model. VYLD is a unique case showing the potential in asking difficult questions around ownership, power and financing before going into the first financing round – and the relevance of legally enshrining steward ownership even when founders are completely aligned. It is also a case showing the potential of steward ownership for collaboration, stakeholder engagement, social entrepreneurship and “ investor relations.