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Can a startup stay away from investors?

At the Christmas party last December, Waldemar Zeiler and Philip Siefer told their co-workers, “that in 2019 unicorn will no longer belong to both of us founders, but to ourselves and all those involved.” The Berlin condom startup wants to become a so-called self-owned company, which can no longer be sold because shares may only be passed on internally and not to external investors.

It’s only the beginning

It should be ready this year. But when and how exactly, the unicorn founders are not sure yet. “Our decision-making journey is just beginning,” says Zeiler on Wednesday evening at a panel discussion in Berlin. Instead of presenting their own plans, Einhorn has therefore “courageous companies invited, who have already dared” and the audience in the Kreuzberg market hall Nine now report their experiences. The interest is great: about 500 tickets have been awarded for the event and an even longer waiting list, says Zeiler, even if not quite as many people have really come into the winter cold market hall.

Christian Kroll is sitting on the stage. He ceded the company largely to the Swiss Purpose Foundation last year behind his green search engine Ecosia. This may now veto, should he ever try to sell the company or siphon off profits. Profits may only be reinvested in the corporate purpose of planting trees around the world. “The bigger the company became, the less I thought that I had the right to own it,” says the founder and CEO of Ecosia this evening in Berlin. In addition, he had slowly no longer believed that he will not at some point sold. “Many asked: When are you finally going to make the big exit?” So Kroll poured his promise into a new ownership structure.

“Normal salary” for the CEO

The most difficult part was the step from plan to implementation. “When you get to the point that you really have to give your baby away, then you start to doubt,” says Kroll. Today he quarrels no more, at least not monetary: “I can draw enough security from a normal salary,” says the CEO, who is not the person with the highest salary according to Ecosia. Elsewhere, too, he can feel safe: although the Foundation can veto its two main points – sales and profits – it still has a majority of voting rights in the remaining questions of the management.

Search engine Ecosia: “We are still hanging on the drip of capitalism” Ecosia founder Christian Kroll has ceded the company behind a green search engine to a foundation. He now has to give up profits. What drives him?

All employees can participate

Soulbottles, as Marketing Manager Laura Zuckschwerdt explains in the market hall, says: The voting rights are here since the beginning of 2018 in a GbR, in which all employees could participate, after the founders Georg Tarne and Paul copper withdrew from the operating business have. When decisions have to be made, today, unlike in the past, they “no longer think about Georg and Paul,” says Zuckschwerdt. Instead, Soulbottles is now a holocracy in which decisions are made transparently and with the participation of as many as possible.

Which not only has advantages: “I am allowed to have a say, but I have to”, Zuckschwerdt describes her personal responsibility. “Not everyone wants that.” That’s why Soulbottles has different roles. Those who do not want to vote do not have to participate in the GbR, and only three people would have volunteered as “suspects” reported that would have to be liable in case of bankruptcy. It’s the third question next to ownership and participation in Self-Owned Companies: who stands for what happens when something goes wrong?

“That changes the capitalism”

“After all, what we do is changing capitalism,” says Armin Steuernagel. “We are separating something that has always been one and the same thing over the past two centuries: power and money.” Steuernagel is co-founder of the Purpose Foundation, with which Ecosia, Soulbottles and, soon, Einhorn, will work together. She supports companies on their way to a self-owned company. It deals with the question: “Who governs the institutions in which we spend a large part of our lives?”

Of course, not every company can easily change its ownership structure, such as relying on external investors. “Not everyone can bootstrap, you have to help them,” says Steuernagel. “But VCs continue to operate with the old equation: the more you invest, the more impact you have.” Self-ownership becomes difficult even at a certain company size. “At N26 that would not work, because they promise their investors such a high return and the valuation generates such a pressure,” explains the founding founder. The Berlin-based startup recently collected 260 million euros and is now valued at 2.3 billion euros. For smaller fintechs with less ambitious goals, a change would be quite possible, says Steuernagel.

Why do not more founders dare to give up their businesses?

“Because the prevailing startup mindset is: I want to get rich and make a lot of money!” Says Christian Kroll. If founders and investors did not move, the impulse would just have to come from elsewhere, says Laura Zuckschwerdt: “I would like to see people go to their bosses and say, ‘Give us the company!'”

Published inStartups

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