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title: Exit to Community
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Using web3 to create more equitable businesses

| View in browser Exit To Community   In this month's issue, we're exploring how we can build more equitable businesses (and societies) by embracing community-ownership models and leveraging new web3 technologies. Let's dive in!   Entrepreneurs usually don't start and build companies for the sake of getting rid of them. But that's essentially the typical design of the startup pipeline (pre-seed, seed, series a...., aaaand exit). People put in the hard work in order to, one day, sell the company to a bigger company or retail investors via an IPO. Wealth and ownership basically move from investors to investors. And the hard-working employees as well as the early and loyal customers are often left out.   What's more, once an exit is done, these businesses typically lose their character and purpose, now being part of either the big corporate 'let's fit this into our bigger portfolio' strategy or the old 'shareholder value maximization/stock market casino' system.    What if there is a way to change that? And what if, in the process, this ends up shifting the core reason and incentive of why companies are built from one that's focused on money to one that's focused on community? 🎟 Exit To Community "We think startups would be more usefully disruptive if they delivered their rewards to the people who make them valuable rather than to the already wealthy." - E2C   Exit to Community (E2C) is an alternative way of exiting by sharing the business with the people who value it most - i.e. the employees, customers, and partner organizations. It's about creating a new story of purpose for startups and a more accessible and equitable way of sharing wealth.   Now, this whole idea is of course not a new one. We all know the concept of cooperatives. For example, in 1941 Swiss grocer Migros handed out shares to over 75,000 of its employees and customers turning the business into a fully community-owned cooperative. What's new today, however, is that the rapidly increasing interest in this topic is accompanied by new legal frameworks and new technologies that enable a more seamless transition to community ownership. And on top of that, we have E2C and other organizations exploring community-ownership options with the aim of making Exit to Community a more viable and easier option for businesses.   This newsletter goes out to over 5,500 people who are changing the way business is done. SUBSCRIBE and join them!   🤝 Cooperatives x DAOs One new set of technologies that might have the potential to make exit to community and community-ownership easier and more transparent can be found within the world of Web3.    One could describe Web3's core idea as enabling ownership on the internet via digital technologies. And this idea has recently led to the invention of digital tech that can simplify community-ownership initiatives. For example, last month, Swiss (yep them again! 😆) crowdfunding platform WeMakeIt has started selling its entire business to its community (so far, over 5,000 people bought in). This is only possible due to new legislation that enables businesses in Switzerland to sell shares of a business in digital format. WeMakeIt is therefore now selling its company shares via tradable digital tokens on the blockchain, without any bank, intermediary, or actual signatures needed. And no, you don't need a crypto wallet or any of this to participate 😉.   Once an Exit to Community is done, governance issues come into play. How can community owners take part in decision-making, what about profit-sharing... and all that stuff. Here Web3 offers the so-called DAOs (Decentralized Autonomous organizations). DAOs essentially offer a new internet-based operating system for organizations that are collectively owned and managed by their members. Everything runs transparently on blockchain-enabled digital tokens. DAOs have built-in treasuries that no one has the authority to access without the approval of the community and decisions are governed by proposals and voting to ensure everyone in the organization has a voice.   The main benefits of DAOs are transparency and decentralization. As everything works via digital tokens, every token owner, proposal, vote and outcome.... - basically all the governance records - are stored on the blockchain which is readable or accessible by anyone. This creates trust and enables a more seamless and much faster, decentralized decision-making. It also allows for an easier way to distribute profits or ownership among the community by using so-called token airdrops (which can be a form of Exit to Community if it's linked to ownership). A DAO can easily airdrop digital tokens to those who have built or used its services or products, even with nuanced distribution rules (e.g. the earliest and most active customers receive more).    As DAOs still face quite some hurdles (e.g. legality, no intrinsic purpose-driven model, the tech-bros culture), and cooperatives need better, more modern organizational tools, a model that blends the two might be an interesting solution. For example, U.S.-based Opolis is a digital employment cooperative that helps freelancers, solopreneurs and gig workers access typical employment benefits (payroll, healthcare, retirement insurance...). Last year, the cooperative launched a DAO and its own $WORK token to its employees and members to manage governance and incentives. The company still runs like a cooperative (i.e. 1 vote per member) but now also leverages web3 tech for its community-owned business.   "At the end of the day, the best framework for an organization may not be a choice between a cooperative or DAO model, but a blend of both. [...]   By learning what we can from the past, and looking forward to the future, We can create communities that embody the best of both worlds: effective, principled, well-resourced organizations working to build a more equitable, democratic, and collectively-owned future." - Austin Robey   If you are eager to dive deeper into these topics, we highly recommend you to check out these sources: What Co-Ops And DAOs Can Learn From Each Other Exit to Community DAO Meets For-Purpose-Enterprises Startups Need a New Option: Exit to Community World Economic Forum - DAOs Beyond The Hype   INSIGHTS \| From Around The Web We have reached peak greenwashing How to engage employees on your net zero goal Polar bears vs. solar PV: Is it time to rethinking how sustainability is visually marketed? Why you should care about pronouns at work How ESG reporting signals a shift towards a revised 'social contract' Talking to LGBTQIA-led B Corps about practicing inclusion and building credibility all year long How Ikea's impact integrity clicks into place B Corp's sustainability status slides as Nespresso joins the ranks Two Large-Scale Holacracy Experiments: Zappos.com vs. Bol.com   COMMUNITY \| News & Wins What have our community members been up to this month? Ele Ward launched a new company called Ctrl Alt with the purpose of bringing the previously exclusive world of investing in alternative assets to all. Hanns-Christian Mahler has been awarded the 3rd place in the Modern Work Award with his company ten23 health. Amanda Stassen launched a new episode of her podcast Purpose Powered Brand starring our amazing, former BoP colleague Izzy Ahrbeck. Stacy Neier Beran shared the coursework of her undergraduate Design Thinking students at Loyola University Chicago. Anje de Jager wrote an interesting article about the value of the B Corp certification and bigger companies like Evian getting certified. Charlotte Piller's circular and regenerative fashion startup Lotta Ludwigson has been nominated for the 'Kreativepiloten' (creative pilots) award from the German government. JOIN US Not a Business of Purpose member yet? Why not? Apply to join our online community of 1,500+ purpose-driven business professionals now and get access to our Slack space. Thank you! 🙏   www.businessofpurpose.com   TrendWatching BV, Wibautstraat 131D, Amsterdam, NH 1091GL, The Netherlands Unsubscribe |
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