Innovation & Vision
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The tendency for large companies to buy smaller ones has clearly increased in recent years. BlackRock is already the largest asset manager in the world - the US group holds shares in all 30 largest German companies and, at 6.30 trillion dollars, has more capital on its books than the Federal Republic of Germany through its gross domestic product (GDP). The Purpose Foundation from Basel/Berlin wants to change such concentrations of power. Purpose advises companies that want to implement alternative ownership concepts and invest in those that "belong to themselves" - to strengthen corporate responsibility. We met Adrian and Achim Hensen from Purpose, who are not only twins and studied business psychology, but are also fighting for a new version of business and entrepreneurship: How exactly does the Purpose concept work? And what do creative people get out of it?
CCB Magazine: Hello Adrian and Achim, you co-founded Purpose three years ago, a foundation, cooperative and at the same time a non-profit limited liability company. In the meantime you are a team of nine people. Please tell us: What is the idea of Purpose, how does your model work and why do we need it?
Achim: With Purpose, we investigate the question of what constitutes healthy corporate property and design very concrete solutions for this. The aim is to bring more companies back into the world that manage the company themselves and thus also bear responsibility. For years we have observed the tendency for companies to become more and more objects of speculation. Today's social and ecological problems are partly caused by the economy - there is often almost structural irresponsibility. Profit maximization eats away at the very essence of business.
Adrian: Responsibility also dwindles because decision-making power is lost. This is where we come in: We work for an understanding of ownership that we like to describe with the English term "steward-ownership", freely translated it means "responsible ownership".
CCB Magazine: And that means concretely?
Adrian: Two principles are ensured by this: Profit is always a means to an end and the steering wheel of the company remains in the hands of those who are actively involved with the company. If this is legally binding, companies belong to themselves and are also managed in trust by people who feel deeply connected to the company's mission. In their DNA - ownership - it is thus ensured that they can remain meaningful and independent in the long term.
We invest specifically in companies that belong to themselves. And we encourage others to invest in companies that implement the concept of "responsible ownership"
CCB Magazine: And what exactly does Purpose do? How do you support these companies?
Adrian: We focus on two core problems: First, we enable companies to easily implement the concept of "responsible ownership". We offer special consulting services for this purpose. Secondly, we are committed to ensuring that self owned companies have enough capital available. To this end, we have set up a fund and also built up an investor network. We and the investors make targeted investments in companies that belong to themselves, while at the same time encouraging others to invest in companies that implement the concept of "responsible ownership".
Achim: We implement our various core activities through different entities. On the one hand, we are a registered cooperative, the Purpose Ventures e.G., from which we invest in companies, also the accompaniment of companies towards new forms of ownership takes place through this. Of course, the cooperative belongs to itself. Therefore no profits can be privatized by investments, the investments are only used to provide capital for start-ups. On the other hand we are a non-profit limited liability company, the Purpose Network gGmbH. In this context we produce publications, give lectures, support research on the topic of responsible ownership and organize events and training courses. Furthermore, we provide a website with different case studies, legal forms and concrete information. These charitable activities are made possible by donations - which we receive from individuals, foundations and companies that support our mission.
CCB Magazine: In your booklet "Unternehmens-Eigentumsformen im 21. Jahrhundert" you describe the development of how it could have come so far that approaches like Purpose are needed. Adrian and Achim, what is the fundamental social problem?
Adrian: Put very simply, I would say that you sense a problem when you listen to many people today: economy often seems to be something negative. Something that creates problems. Something that does things we don't want. Environmental degradation, centralization of power and capital, increasing inequality - and at the same time you often feel a form of powerlessness - nobody seems to be responsible.
Economy often seems to be something negative. Something that creates problems. We must therefore redesign the economy and create solutions
Achim: We could remind ourselves together that the mission of business is to satisfy the needs of the people. Strictly speaking, we should not just talk about reshaping the economy, but creating solutions. Companies - the places where people spend so much of their lives and where they want to work together in a meaningful way - should not be speculative. So a core problem for me is the idea that profit maximization is the purpose of our working society today. And one solution is for full responsibility to remain within the company again.
CCB Magazine: But what does that mean in practice? How can one ensure that full responsibility remains within the company and also with entrepreneurs?
Adrian: It's about basic questions like: Who has the power of decision? Should the company be tradable and bequeathable? Where are the profit rights? We want to answer these questions together with as many companies as possible in a long-term and meaningful way. The goal is that as many companies as possible simply incorporate the principles of responsible ownership in their own articles of association. So far so good, Purpose would not really need to do that. But the problem is that these principles can be changed again at any time. So as an employee or customer I don't know whether the company will become a speculative asset or whether profits will be mainly privatized. To make a binding, legal promise and to anchor one's own values is the goal of Purpose and can be realized concretely with the Purpose Foundation and other ways in which we support.
CCB Magazine:What are your conditions? Who can make use of Purpose, who cannot? And do you specifically approach companies or companies approach you? Are there companies in which you do not invest?
Achim: We support the companies that want to rethink property. We therefore invest exclusively in companies with responsible ownership or in companies that are in the process of acquiring it. When we are convinced of the team, the market and the product, we invest.
Adrian: The core objective of our investments is to enable companies to remain independent and meaningful - even and especially when they are raising capital. Any company that makes a binding promise to these principles is fundamentally eligible for us. In essence, the classic company valuation in the sense of a sales value is of no importance to us. Rather, one of us must feel connected to the mission of the company and believe in its future.
CCB Magazine: Do you also pay attention to criteria that stand for a new culture of responsibility? For example, do ecological or social criteria such as fair payments or similar play a role in the selection process?
Achim: Ecological and social criteria are naturally important. Most of the time, however, such companies already pay attention to such criteria when they "belong to themselves".
CCB Magazine: If you then invest in a company: What does the company have to pay back and what do you earn?
Achim: With the investments we receive a dividend for the provision of the capital. In the ideal case, we make profits through the repayments. However, these are fixed in the amount and the investment is made without us receiving voting rights. The exact conditions depend strongly on the individual case and the risk profile. In concrete terms, this can mean, for example, that Purpose receives 2.5 times the investment over ten years. In turn, we use our profits to invest in further self owned start-ups and to compensate for any losses.
CCB Magazine: Who have you financed everything? And in what amount?
Adrian: Various companies in Germany, Finland and the USA. The amount of investment varies greatly and is between 50,000 and 500,000 euros. It is important to say here that we are rarely the only partner of the companies. For example, in the case of Sharetribe from Finland, we invested together with more than 400 partners in an equity crowdfunding round. Other examples of our investments are the companies Jolocom, CoGalleries, the Creative Action Network or Zielwear.
CCB Magazine: You only invest in companies with responsible ownership. But how do you plan to get companies to rethink what they do, which are basically the opposite of what you do? In other words, speculative large companies or companies that buy each other out.
Achim: Of course we work with people who do not see their company as an object of speculation anyway. We don't have to convince anyone to rethink. However, it is important for us to contrast the ever-increasing focus on profit maximization with an alternative narrative. In the long term, it will probably be the customers, employees and we as a company that decide on a major rethink. But for this to happen, concrete alternatives are also needed.
CCB Magazine: Our platform is for artists and creative companies. Creative professionals often have only limited growth and anchor sustainable principles, which they then even set against profit orientation - this was found out for example in the study „Booming Berlin“. A study by Matthias Euteneuer on self-employed people in the creative industries came to a similar conclusion. Does this mean that creative entrepreneurs are not exactly the type of entrepreneurs you are looking for? In other words, who keep their business form in their own hands? Or can creative companies simply not keep up financially because too little is invested in them? A study on venture capital by Juliane Schulze, for example, found that investors hardly invest in creative companies.
Adrian: For us it is not decisive whether the entrepreneur is a "normal" or creative one. More important to us is to find a solution for those who are looking for sustainable investments without loss of control and suitable ownership solutions. We develop these together with the companies. Of course, it is also about making it economically sustainable. Because our investments are not donations and the companies in which we invest must also pay back the money. It needs therefore straight our conviction that the financing can also be paid back. But this does not mean that the next "Unicorns" in the world have to be.
CCB Magazine: So far there are hardly any approaches like Purpose. Are there differences in different countries? Are there pioneers? And would you see yourselves as pioneers of a new development or even movement?
Achim: Meanwhile there are many organizations and people who want to use good ideas and approaches to work for a different economy in the interest of people and society. These include the Benefit Corporation, Zebras Unite and other actors in the public welfare economy. Our perspective on the ownership structure is not new in form either. Rather very old - Ernst Abbe created Carl Zeiss, the first foundation company in the world, 130 years ago. Today, we see ourselves more as a sponsor, speaker and facilitator of this idea. We are not the pioneers, but the entrepreneurs who are breaking new ground.
We see ourselves as the carrier, loudspeaker and maker of our idea. But we are not the pioneers,
but the entrepreneurs who break new ground
Adrian: We now have many requests from all corners of the world. In all these countries there are different laws and regulations, and accordingly the solutions differ in each country. However, we have always been able to find solutions for the different legal areas. Our current focus is on Western Europe and the USA, but we are preparing to support companies in other jurisdictions as well.
CCB Magazine: Achim and Adrian, what needs to happen for your vision of a paradigm shift from profit-maximizing to sense-maximizing economy to become the norm in the future?
Adrian: We need an infrastructure in which it is normal and easy for companies to adopt meaning-based ownership. That means simple solutions, success stories, lawyers, networks and access to capital that flows into companies that have this form of ownership. That is what we are working on.
We are not saying that Purpose and "ownership of responsibility" are the solution to all problems. But we can address a central problem in society with concrete solutions
Achim: But we must also involve consumers so that their buying behavior supports companies in responsible ownership. Perhaps it would also be time for politicians to create conditions in which companies have easier access to forms of ownership. Business must once again serve people and society. We are not saying that purpose and "responsible ownership" are the solution to all problems. But we can address a central problem in society with concrete solutions in the form of ownership of companies.
You want to know more? Then we can recommend the Property Conference with Purpose on October 30-31 in Berlin. You will find all information here.
Category: Innovation & Vision
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