Steward Ownership Bootstrapping?

I’m throwing this here in “Campfire” since it is a more general question…. I’ve been reading up on Steward Ownership and I’m a bit unclear on how it works; provided I’m only seeing examples of more mature companies. For example; I see the corporate structure of and while interesting; it is an example of a functioning mature company that converted to this structure. Obviously Zeiss et al also are mature companies.

So how would you take the trio (Business person, Coder, Product designer) like is proposed in the h2020 initiative and build it into this structure from day 1? Or do you?

In short, how is this bootstrapped?

Part of my unease is I’m having problems mapping the structure to a start up environment; and a little bit of how it’s different; being what makes it “tick” better.

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I think @BlackForestBoi is our resident Steward Ownership expert. Maybe he has some perspectives?

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So the 2 most basic principles of Steward Ownership are:

  1. A company can never be sold
  2. Rewards to investors and employees happens in the form of a predefined, capped profit share. (basically a loan with very high interests)

You can start with that from day 1 as we did with, which is actually easier to do than to switch over later due to legal problems.
Steward Ownership is perfect for bootstrapped companies, but you can also take up investment with it, if you need it. Like we did.

The real challenge to be Steward Owned is that there is not (yet) a lot of liquidity on the investor market because it’s a relatively uncommon model in the software world, and that you practically need to generate revenue as soon as possible. To get investments you need to convincingly show how you can make revenue, as opposed to just show that you can grow and then exit - which is difficult in the early days.
However being able to generate revenue and profits is definitely an advantage because you naturally and sustainably grow, and are hard to kick off your feet once these gears are rolling.
2 companies that recently switched was Buffer and Sharetribe. Buffer needed quite an expensive buyout though, although they managed to make the first big step in that direction.

Where SO does not work is in models where you need high upfront investments in the range of millions.

Does that answer your questions?


Three things

  1. You need longitudinal studies/examples of how stewardship based business models can perform well in the long run. And by Stewardship I am referring to the concept as a general idea of caring for something so that it remains healthy for the future - rather than a specific form of incorporation. One of the more interesting examples is that of Handelsbanken, one of the major actors in the Swedish Banking sectors. You will find a detailed description of it and other examples in this anthology: politisk-och-ekonomisk-demokrati-i-tillsammans-3e-korrekturet.pdf (266.8 KB).

  2. A few years ago, we ran an Edgeryders community event aimed at making sense of Stewardship of material, immaterial and relational assets. It was the culmination of a longer conversation which started with people in the community travelling around Europe and conducting interviews with people who were running for social good projects from community gardens to larger scale initiatives. Maybe the thread on Stewardship Through Market Goggles might be of interest. You find the fill report here: 263421647-Can-networked-communities-steward-public-assets-at-scale.pdf (37.1 MB) .

  3. More recently: Nathan Schneider ( and I suppose others with him) have put a bit of thought into this, while I do not see any mentioned to date) are exploring what they call an “exit to community” alternative to the usual VC path:

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@nadia — thanks for these; my scandi language skills are nascent so the Swedish paper is a bit of a challenge, but the two other points are quite valuable; I’ve been stuck as an employee and shareholder in the “Zombie” company described in Nathan’s paper and unfortunately the company was strip-mined for it’s assets.

man what a mess :frowning:

I found you an English paper which I think was one of the sources referenced in the anthology (got it from the professor who ran the project to put it together) : performance of worker coops 12.pdf (617.3 KB)

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@BlackForestBoi — Bottom line up front; yes it does answer my question :slight_smile:

Thanks for highlighting the challenges involved. This is exactly where I was struggling since the years of seeing either “grow to exit” or “ipo” kinda skews the models your accustomed with seeing; and leads to blindness to other forms of organization.

@Emile : As for the story about Handelsbanken: the key part is that In 1973 they introduced an employee profitsharing scheme. When Handelsbanken meets its goals of higher return on equity than the average of the other listed Swedish banks, a profit share is paid to a foundation named Oktogonen, which keeps its fund entirely in Handelsbanken shares. The staff gets paid once they retire which aligns the interests of staff ( I think including the management layers) with securing the long-term profitability of the bank. The foundation owns circa 10% of Handelsbanken’s shares. If I am not mistaken it was one of the banks that did not need a government bailout during the most recent financiam crash.