A more Transformative economy requires more equitable term sheets and ownership structures. We research these models – most currently Employee Ownership and other Alternative Ownership Enterprise models – and develop solutions for investors to make them more commonplace.
Capital is deeply intertwined with the major challenges of our time – wealth and power inequality, corporatization and consolidation, racial injustice and colonialism, the climate crisis – and in fact has been a driving force in creating those challenges. These big issues can’t be solved by investment alone, and they certainly can’t be solved just by investing in companies that have impactful products and services. They require a fundamental rethinking of value, ownership, and governance over the capital that affects all communities. In practice, this looks like shifting power to workers, entrepreneurs, and communities within the terms and codified relationships of investment and business structure. These terms and relationships form the models that are the building blocks of the economy.
Part of the problem is in the current models that economic actors have access to. The predominant models are based on the traditional notion of shareholder primacy, where investors get to make most major decisions and accumulate more capital as the fundamental aim. We see shareholder primacy in the relationship between funds and entrepreneurs, the relationship between management (which represents the interest of shareholders and often are shareholders themselves) and workers, and the absence of non-investor decision makers at all places in the chain of capital.
New approaches are emerging from entrepreneurs, business networks, progressive investors, researchers, and grassroots movements building social and solidarity economies. These approaches run the gamut of finance:
We help investors adopt these models, terms, and approaches, or Transformative Financing Structures. These structures, if made widely popular, won't solve our major issues alone, but will set an economic backdrop where those most marginalized are able to dictate major aspects of economic activity.
We launched a major research and advocacy project that identifies firms that significantly shift economic value and decision-making power toward the non-investor stakeholders they impact, such as workers, producers, consumers, community members, or even a non-financial purpose. We develop resources and tools for investors, hosting conversations and advisory engagements to dig even deeper.
One of our core advisory services is to help investors understand the different tools at their disposal, and help them develop investment strategies and technical models. A recent example is our work to help the Media Development Investment Fund evaluate and improve the structure of their guarantee offering. As we focus our work in this program on Employee Ownership and other Alternative Ownership Enterprises, we are having conversations with partners who are interested in having Transform Finance support them on their inquiry into this space. Reach out if you're interested!
Building on all of our work documenting and analyzing the world of Alternative Owneship Enterprises for investors, we are now applying our research lens to the need to develop new financial products and vehicles that could dramatically expand capital available to impact-first Employee Ownership. This initiative researches, tests, develops, finds partners for, and launches new financial innovations. We are developing strategic partnerships for the research phase and for the ultimate launch of new innovations.
We have several resources on Alternative Ownership Enterprise, Alternative Financing Structures, and other innovative financial tools on our Learn Page.
Check out our resources
