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THREAD: With @worldbrain we don& #39;t take VC money or use shares to reward investors & the team. We raised 280k so far and still own 100% of our shares.
In this thread I want to share why we did it and the pros and cons for anyone who wants to do the same. 1/
In this thread I want to share why we did it and the pros and cons for anyone who wants to do the same. 1/
WHY? Starting @worldbrain, I knew that the root of the destructive profit/growth maximisation mindset is the unlimited reward potential of holding shares in a company. I didn& #39;t want to build this with the same reward models that contribute to the problems we try to solve. 2/
@worldbrain& #39;s goal is to battle misinformation by reducing information overload. Everyone has different needs for processing knowledge, so it needs a diverse network of interoperable apps where people can iteratively find and migrate to better tools to organise information. 3/
This infrastructure needs an openness where services can more easily lose users. Therefore it& #39;s antithetical to the economic incentives of VC/equity based investments which requires the creation of lock-ins and market dominance. So what& #39;s the alternative? 4/
It& #39;s an investor reward model called Steward Ownership. It follows 2 rules: 1) The company can never be sold. No Exit. 2) Investors are rewarded with a capped profit share. So there is no market-driven value speculation or unbound profit/growth expectations. 5/
For investors to win with a capped profit share, we need to become good at being a profitable & sustainable service, not growing at all costs for an expensive exit.
The capped returns gives us also the economic freedom to create an open system and be socially responsible. 6/
The capped returns gives us also the economic freedom to create an open system and be socially responsible. 6/
This is bc if we make less money because we lose some of our users to other services it will only delay the investor returns, not lower their total, and allows us to reinvest excess profits into our workers conditions, sustainable supply chain, or charity. 7/
With VC/equity based investments, more company profit/growth means more investor profit, so everyone tries to optimise for maximum returns that leave little room for losing users or being socially responsible. #SurveillanceCapitalism & exploitation are inevitable. 8/
PROS
People are happier & more engaged bc they don& #39;t work primarily for shareholder return.
6x higher survival rate bc of more engaged workers and need for sustainable revenue, not hollow growth.
Everyone can get fairly wealthy when building useful products. (see @Mailchimp) 9/
People are happier & more engaged bc they don& #39;t work primarily for shareholder return.
6x higher survival rate bc of more engaged workers and need for sustainable revenue, not hollow growth.
Everyone can get fairly wealthy when building useful products. (see @Mailchimp) 9/
CONS
Difficult to raise money bc it& #39;s a new in the (software) investment world. Has been around for 150yrs (invented by @ZEISS_Group and @BoschGlobal)
Seems initially more risky bc of capped returns, but evens out over portfolios. You grow slower (but more sustainably) 10/
Difficult to raise money bc it& #39;s a new in the (software) investment world. Has been around for 150yrs (invented by @ZEISS_Group and @BoschGlobal)
Seems initially more risky bc of capped returns, but evens out over portfolios. You grow slower (but more sustainably) 10/
Want to get started?
Check out @purpose_economy and @Zebras_Unite. Easiest to implement with a regular loan agreement. No need for notary or expensive contract.
More solid: A Silent Partnership contracts or the purpose& #39;s golden share model (but dependent on the country). 11/
Check out @purpose_economy and @Zebras_Unite. Easiest to implement with a regular loan agreement. No need for notary or expensive contract.
More solid: A Silent Partnership contracts or the purpose& #39;s golden share model (but dependent on the country). 11/
Can be done in many ways, tho most important to keep the principles of non-tradability of shares and capped investor returns. Governance and reward distribution is individual to every team. Be excited about the conversations about what & #39;value& #39; means to you and your team. 12/
Also ask yourself: What is the world you want to live in? One dominated by billion dollar companies, where consumers have little freedom and where privacy, workers and the environment are exploited, or where companies are a synergetic part of a socially responsible economy? 13/
I have deep gratitude for @battagliaem @pwang, @daviddias, @selforganize, @LedgerEu, @mozilla, @Digitalscience, my Family and Friends and Memex users for funding @worldbrain. Also our team @vince_d_boer @hellokozmo, @poltak_ @kellective for your hard work, dedication & fun. 14/
I also want to give a shoutout to all those that heavily inspired and influenced this thinking: @hypothes_is, @bryce, @bigbluehat, @itsDanielSuarez& #39; demon and freedom, @aral , my mom, Gerben, @steuernagel7, @AdrianHensen, @purpose_economy 
https://abs.twimg.com/emoji/v2/... draggable="false" alt="❤️" title="Red heart" aria-label="Emoji: Red heart"> /fin
