Learn
- Learning Journeys
- Resource hub (coming soon)
Sep 11, 2025
by Purpose Evergreen Capital
Mogli is more than just an organic snack brand — it is a company with a purpose. Through its organic and Demeter-certified snacks for children aged three and above, and even more through its expanding initiative around nature-related activities, Mogli aims to transport its core message to kids: grow wild & free, reconnect with nature and be ready for adventure.
Although the founders always viewed themselves primarily as stewards of the company’s mission rather than financial owners, Mogli was initially founded as a standard GmbH (German legal form of a limited liability company) for practical reasons. Over time it became clear that the structure of a standard GmbH did not fully align with the company’s long-term vision. As Mogli transitioned into a growth phase and for the first time had to determine the use of its profits, the need for a new ownership model became more evident — one that empowered employees, ensured the companies’ long-term independence with the mission at its core, while still allowing a compensation of the incurred founders’ contributions. Hence, Mogli transitioned into steward-ownership with the veto-share model by the Purpose Foundation (a legal workaround to implement steward-ownership when there is no appropriate legal form available, find more information here) and Purpose Evergreen Capital (PEC) providing the required aligned capital in return for redeemable shares. With this the abovementioned objectives were successfully achieved, ensuring both financial stability and mission integrity.
This article highlights two key insights that helped establish a fair and future-proof approach to structuring founder compensation and investor returns — for the benefit of the founders, investors, and the company, both now and for future generations:
Since providing capital to steward-owned companies is still far from being the norm as most investors require control over the company in return for their capital, this article aims to provide greater transparency on how such models can be structured to benefit both founders and investors.
Founded with the mission to reconnect kids with nature, Mogli offers a variety of healthy snacks for children, distributed through supermarkets, drug stores, and its own website, reaching customers in over 50 countries. The company’s commitment to sustainability and natural ingredients reflects its core values: promoting a healthy lifestyle and environmental stewardship.
The company was founded in 2012 by Emanuel Schmock, who at the time of the transition owned 75%, and Armin Steuernagel, who owned 25% of the companies’ equity. Both founders shared a deep concern about the increasingly urban and media-heavy environment in which children were growing up. They envisioned a brand that would inspire kids to engage with nature through wholesome snacks and outdoor activities. The brand name “Mogli” was inspired by the book and film The Jungle Book, which tells the story of a child raised in the wilderness by animals, forming a deep connection with nature.
Over the years, the market for organic and healthy snacks for babies and toddlers has expanded significantly. Mogli differentiates itself by focusing on children aged three and above rather than infants, a segment that was already well-served. Additionally, while many sustainability-focused start-ups in the space have been acquired by large corporations — such as Logona, Sante, Bionade, and Pukka Tea — Mogli has remained privately owned, committed to its independence.
From the very beginning, the question of an aligned ownership structure was essential, as it directly linked to Mogli’s core mission and product philosophy. The founders deeply reflected on the concept of ownership — particularly in relation to nature. Who truly owns the land that sustains us? What gives humans the right to claim nature as their own? These fundamental questions reinforced the belief that the company’s ownership structure should align with its purpose of continuously fostering a harmonious relationship between children and nature.
Initially, the founders considered establishing a foundation rather than a GmbH, but due to legal complexities, they ultimately opted for a GmbH structure while holding on to the vision of transitioning to a more aligned ownership structure, one that would later become known as steward-ownership. And while the term steward-ownership hadn’t been coined at the time, the core principles were already alive — especially among Mogli’s co-founders Emanuel Schmock and Armin Steuernagel (who later went on to co-found the Purpose Foundation). The dual role of Armin as co-founder of Mogli and managing director of Purpose Evergreen Capital — Purpose’s funding vehicle and the investor providing the capital for the transition — will be discussed later in the article.
By 2019, a clear trigger point emerged that reignited the conversation about steward-ownership. As the company transitioned from its pioneering phase into profitability and growth, profits were generated for the first time, and it became evident that a structural shift was necessary to ensure the income generated would serve the purpose of the company. In the process of creating a new structure, it became relevant to consider how building this company might justify a relevant contribution to the founders’ pension savings. This discussion has been put aside in the early years of the company. Emanuel and Armin recognized that Mogli needed a long-term structure that would allow the company to operate independently while still enabling them, mostly Emanuel, to stay actively engaged. Much like a child growing up, the company needed the independence to thrive on its own without its ‘parents’.
Factors that contributed to the final decision to transition to steward-ownership included:
● Empowering Employees: With the shift towards steward-ownership, voting rights of the company will always be within the hands of people who are actively involved in the company. This right cannot be purchased but instead will be handed over by defined criteria. So instead of having to buy potentially expensive shares to get a vote, people are invited to get actively engaged in the company’s decision-making process and ultimately possibly becoming stewards. In the case of Mogli this process is still in the making, but it is expected to include more than just the managing directors in the role as stewards.
● Leveraging Existing Expertise: The Purpose Foundation had established successful case studies and frameworks, offering support and guidance that Mogli could utilize without having to build a new model from scratch. Purpose Evergreen Capital (PEC) was then able to support the specific structuring for Mogli. This was especially valuable given the company’s limited capacity for extensive restructuring efforts.
● Acquisition Offers: Mogli received multiple offers from corporations with the goal to fully acquire the company, with valuations in the double-digit million range. Being confronted with this opportunity, Emanuel felt that steward-ownership as a structure where profits and assets will be solely and permanently dedicated to the company’s mission is the best solution for Mogli to prevent future decisions exclusively focused on profit-maximization that might harm that mission.
💥 Risk of accepting appealing acquisition offers from corporates: When corporate offers arrived, a fundamental question arose: How to create the largest possible impact? The options boiled down to two key choices: (1) selling the business and using the profits to invest into new impact-driven projects, or (2) embedding impact into the company’s very foundation — ensuring that its mission remained protected for the long term. For many founders, including Emanuel, a company is like a child where responsibilities extend up to employees and other stakeholders. Emanuel knew he could not simply relinquish control and trust that a corporation, regardless of its promises, would maintain Mogli’s mission and values. Hence, he deeply believed that the 2nd option would be the one creating the greatest value for the company, its employees and other stakeholders.
After thorough consideration of their options, Emanuel and Armin decided in 2021 to transition Mogli into steward-ownership. While the use of the veto-share model, in this case provided by the Purpose Foundation, offered a framework for the ownership structure, it was a challenge to find the appropriate funding for the transition. Mainstream investors either require some sort of power in return for equity (e.g., via board seats with voting rights) or a pre-determined repayment structure in case of debt. Purpose Evergreen Capital (PEC) differentiates itself from mainstream investors as it provides patient, value-aligned capital that is not tied to control over the company. PEC provided the required funding for the transition in return for redeemable shares (below we will provide more information on this type of equity). To structure the investment, two major challenges arose, both common in the funding journey toward steward-ownership: (1) determining an appropriate founder compensation and (2) structuring a fair return for the investment of PEC.
💡 Purpose Evergreen Capital provides patient, value-aligned capital to small and medium-sized enterprises in or on their way to steward-ownership, mostly in phases of succession, growth and buy-out of non-aligned investors.
Emanuel chose to forgo a traditional exit as he believed to be able to continue bringing value to Mogli and hence, opted to remain involved in the company and support its ongoing development. Armin on the other hand was at this point not operationally involved in the company anymore and chose to fully step back by handing over his voting rights.
Throughout Mogli’s early years, Emanuel had paid himself only a minimal salary to prioritize the company’s growth and profitability. As a result, he had neither accumulated personal savings nor established a retirement plan. Instead, he, as well as his co-founder Armin, incurred private debt to support the company and provided personal guarantees to secure bank financing.
The key criteria for structuring the founder compensation aimed at ensuring the company’s continued ability to grow while adequately reimbursing the founders. In the case of Mogli, the compensation package for Emanuel included two key components: 1. A one-time payment as compensation for the past 10 years of company building and 2. A future upside compensation — tied to long-term company success. Armin’s compensation was based solely on a one-time payment. See how this approach was structured in detail below:
💡 For further information on how a founder compensation can look like for your individual situation, you can deep dive into the matter with the Toolkit for Steward-Ownership and also this chapter of the new online guide on Steward-Ownership Aligned Financing, both provided as open content learning material by the Purpose Foundation. Additionally, we have created a basic Excel model that can serve as a starting point for reflecting and calculating a potential compensation. In the excel you can find a step-by-step guide of the information needed. The paragraph below highlights those key aspects. You can access it via this link.
The difference between the actual wage paid and a comparable adequate market CEO salary was calculated, using industry benchmarks based on company size and location.
💡 As a recommendation, benchmarks should be chosen for the relevant year and country of operation. For example, in Germany, reference data can be found in BBE media’s 2024 report on GmbH executive compensation (“GmbH-Geschäftsvergütungen: Neue Orientierungswerte für 2024”).
💡 The fair wage usually includes any employer contributions that have not been paid due to the self-employment, such as social security payments, pension or unemployment insurance. Furthermore, the interest on the difference between paid and fair wage is normally added per year.
A suitable risk premium was added to the rate used to calculate the interest payments for the difference between actual and fair wage per year, considering the financial uncertainty of the venture.
💡 There are certainly different approaches on how to identify the value of such a risk premium as it depends on the timing and the risk assumed at that time (i.e., providing capital for an established company vs. start-up). One might be referring to corporate bond interest rates as a benchmark, e.g. interest payments for bonds of publicly traded companies.
Any personal loans used to finance Mogli were factored into the compensation, adjusted for accrued interest over time.
For the retirement planning of Emanuel, the net payout value was crucial. Therefore, taxes that he would need to be paid on the compensation were assessed based on his individual circumstances. A premium was then added to the compensation amount to ensure the net payout was adequate.
💡 In the Excel previously mentioned for exemplary calculation, the tax premium has not been considered as it highly depends on the individual situation.
The one-time payment was calculated using the same method for both founders but resulting in different amounts — since Emanuel had led the company for a full ten years, whereas Armin was only actively involved in the early years.
An additional challenge in this particular situation was that Armin was not only a co-founder of Mogli but also founder and managing director of PEC and thereby, a potential conflict of interest during the investment process arose. To circumvent this dual role as co-founder and managing director of PEC, an independent, third party was involved to calculate the valuation of the company and validate the respective amounts of the founder compensation. Furthermore, Armin will not receive any of his compensation, before PEC has not fully been paid back its investment, so that PEC investment will in no way benefit Armin personally.
A second component of the compensation package was contingent on the company’s long-term development. This would only be disbursed after all shares that are held by PEC due to the financing of the first component had been repurchased by the company. If at that point in the longer-term future, the financial health of the company allows for an additional payout, Emanuel might opt for it (in the Key Learning #2 you find an overview of the timing for the compensation elements). This structure ensured financial stability while allowing for a potential future reward for Emanuel’s continued involvement. The amount of the potential upside compensation was determined in-line with the initial, one-time payment, considering that for around 10 more years Emanuel aims to continue working for Mogli prior to stepping away from his role. “My work now feels again like working in a start-up within a growth company as I do not focus on the day-to-day business but rather on the identification of new growth areas for the business. The future upside compensation would provide me with a higher level of security for my pension if these growth strategies work out as planned.” states Emanuel.
Several factors were taken into account to determine what the company could realistically afford while ensuring a fair compensation package for the founders:
● Historical, current, and projected financial performance, specifically expected free cashflows to service liabilities
● The time frame required to repurchase shares and settle financing, ensuring a feasible repayment deadline
● Existing commitments to investors and other stakeholders
● Market risks and economic conditions
● The founder’s role as a key person and potential exit date
Once a preliminary expectation towards a compensation existed, it was put into context to the ability of the company by considering the above mentioned factors. Emanuel’s and PEC’s calculations, itinerated in several steps and scenarios ultimately provided more clarity on the feasibility of the compensation ask. Of course, this analysis is hardly a full-on view on all circumstances, neither a valid truth over time — but in contrast to many other financing mechanisms, it at least includes a feasibility-check rather than monetarizing an advertised vision of an uncertain future.
There are different ways of paying out the founder compensation in the process of balancing founders needs and the companies’ liquidity at a specific point in time. The below mentioned examples are not exhaustive but should provide a general overview.
1) Direct payment: direct, one-off payment in case the company is financially able to do this (optionally via external financing)
2) Debt conversion: keeping the compensation amount in the company as a loan (either being paid out over time or as one-off payment at a pre-defined later point in time, usually including interest)
3) Earn out provision: payment in the future depending on the company’s development and achievement of pre-defined goals, usually defined as a percentage of gross sales or earnings
4) Combination: a combination of the previously mentioned options
In case of Mogli, the founders’ One-Time Compensations (see 1) were paid out via a combination of a one-off payment and a certain share of that compensation going back to the company as a loan. As previously mentioned, Emanuel received an additional earn out option aka the Future Upside Compensation (see 2).
Since the company was not yet in the state of being able to pay out the one-off payment directly, PEC decided to purchase the shares and by this supply the interim financing of the amount until Mogli is able to buy back those shares from PEC without having to fear that those shares could be sold to any other third party (find out more about this in Key Learning #2).
💡 In general, to achieve a fair agreement, open discussions and negotiations between all parties are essential. The founder’s proposed compensation needs to be assessed against the company’s financial capabilities. If the amount is unsustainable, adjustments should be made — such as questioning the amount itself or linking part of the compensation to future growth, improving cost efficiency, or structuring deferred payments through founder loans or earn-out provisions. Often, this process involves multiple recalibration rounds between the investor(s), the founder and the future company management, ultimately leading to a balanced outcome that provides fair investor returns while ensuring the long-term financial health of the company.
At the moment, only specialized investment companies like PEC, Purpose Ventures, Karma Capital, Anthropia Ventures, or FASE ECIIF II provide patient capital that is not compromising the company’s mission while providing a fair and competitive return for them as investors. Unlike traditional investors, where maximizing valuation and short-term returns is the primary goal, steward-ownership aligned financing prioritizes long-term financial health and mission preservation. Data shows that the prioritization of longer-term goals, retention of profits and empowerment of employees should have a risk-reducing effect on investments and thereby, allowing investors to potentially reach market standard returns (see this article for more information on the effects of steward-ownership with data from Denmark).
To achieve the balance of mission preservation for the company and competitive returns for the investor, PEC and Mogli adopted an approach that is among other things based on the idea of conscious contracting, ensuring flexibility and fairness in structuring investor returns (see more information on this type of contracting below). PEC provided Emanuel with a one-off payment by buying part of his founder shares as described under Key Learning #1. Those shares were transformed into redeemable shares without formal voting power, aligning with the principle of steward-ownership where the steering wheel of the company is in the hand of the stewards, not investors. Moreover, the objective of this type of equity is that the company buys back the shares once it is able to. While not having formal power, it is a wish of both PEC and Mogli to foster a healthy relationship and support wherever possible. Legally, PEC received certain information and reporting rights for the investment.
Emanuel decided to insert part of the one-off payment into the company as a liquidity reserve in form of a founder’s loan. This loan will be paid back to him once the liquidity situation allows for it without having a negative effect on the business development.
Due to Armins double role, he will only receive any compensation after Mogli has bought back all shares from PEC. Please see the graphic below to understand the different payment times.
The payment terms to fairly compensate PEC for the provided capital included:
● A Standard Dividend Payment: Set at a fixed percentage per annum, aligned with market benchmarks and the company’s capacity, re-evaluated by PEC and Mogli’s management every 5 years based on an appropriate index, in this case 12-months EURIBOR.
● An Adjustable Upside Dividend: Reviewed annually through a structured discussion process, taking into account company performance (e.g. EBIT) and external economic factors (e.g. inflation or market interest rates). For this, the idea of conscious contracting was valuable as the contract only specified certain basic principles on how to come to a unanimous agreement and not a set of pre-defined, non-adjustable rules. In case Mogli and PEC are unable to come to such an agreement, a third party is defined to facilitate and aid the agreement process constructively. If even with the support of the third party an agreement cannot be achieved, there is an arbitration panel that has the final decision power. Please see the info box below for more information on this type of contracting, which is highlighted as one exemplary way of ensuring a fair return for investors in a volatile market environment.
💡 “Conscious Contracting”: The key objective of this concept is to create sustainable, relational, and value-based agreements via a process framework for authentic communication, connection, clarity, and relationship design. It builds on best practices of modern contracts, such as plain language, design thinking, and using visuals. A key principle of conscious contracting is that contracts do not belong to the lawyers or the court. They are living documents that reflect the parties’ desires to come together for a shared purpose.
As a concrete example, in a regular contract, both parties would have needed to agree upfront on the exact mechanisms and rules to determine the adjustable upside dividend. Via conscious contracting, they were able to determine the guardrails in plain language and at a later point determine the exact value of the dividend based on the real factors at play at this point in time. This requires a basis of trust as a precondition and limits the need for upfront negotiations.
● Foreseeable buyback or repayment structure: By using redeemable shares with a buyback formula taking into account the initial financing amount, the financing period (minimum of 7 years), paid dividends and an agreed rate of return on the investment, both PEC and Mogli profit from a transparent and reliable structure to redeem shares. This means that Mogli has the option to buy back the shares earliest 7 years after the investment and the price per share is set based on the paid dividends and the previously agreed return rate. Please see the info box below for more information on this type of equity.
The chosen structure fosters long-term alignment both for PEC and Mogli, recognizing the uncertainties of future market environment volatilities while ensuring sustainable returns. With this, the traditional mechanism of pricing these uncertainties in and betting on being right (and the other one being wrong) is set off as the details of the dividends are discussed on a rolling basis. Past years have shown the impossibility of foreseeing developments — wars and the pandemic have taught us painfully. So, why not save the energy of predicting and use it for building valuable, trust-based relationships and agreed processes?
Since transitioning to steward-ownership and securing PEC’s investment, Mogli has experienced several internal and external benefits.
Internally, leadership responsibilities have shifted, extending the management team and empowering employees to take greater ownership of decision-making without them needing to buy equity and while allowing Emanuel to focus on long-term strategy and business development. The transition has also reinforced Mogli’s mission-driven culture, strengthening employee commitment to its purpose.
While this change was beneficial for both Mogli and the employees, it is important to note that each company and founder have unique needs, and therefore, the journey and implications of steward-ownership will vary. This represents one of the many nuances within steward-ownership.
Externally, retailers and business partners have shown increased trust and support via favorable payment and pricing terms, recognizing that Mogli’s structure ensures reinvestment into its mission rather than shareholder profits. This differentiation has also made the company more attractive to purpose-driven talent, setting it apart from many others claiming to be sustainable.
Knowing that investments in steward-owned businesses are still far away from being mainstream, sharing Mogli’s journey is aiming to offer valuable insights for founders and investors alike. To deep dive further into the topic of steward-ownership aligned finance options, please visit this link for an extensive learning journey.
Asking Emanuel for his advice to the next founder or investor, he suggests:
“Founders: Take your time! Think through the process and the details carefully to ensure you feel at peace with the transition. Build a detailed roadmap to avoid slipping back into ‘business as usual’ too quickly after shifting to steward-ownership.”
“Investors: Build a network and accumulate knowledge! Instead of viewing sustainability — and particularly the ‘G’ in ESG — as a compliance or “nice to have” topic, see it as an opportunity via a focus on steward-ownership. This concept is still nascent within investment strategies, so I encourage investors to share best practices, learnings, and collectively build security for these types of investments.”