Startup Steward Ownership

Startup Steward Ownership: Steward Ownership is a way to legally safeguard a startup’s mission and implement aligned financial structures, whatever the venture’s legal structure—it’s a different type of ownership — not based on maximizing shareholder value, but on the purpose and independence of the company.

Examples of startup steward ownership has existed in Europe for a long time, One example, is the John Lewis Partnership, the eponymous  British department store chain, founded over a hundred years ago by. They say, “We are one of the oldest employee-owned businesses in the UK, founded on the belief that there is a better way of doing business. Being owned by our Partners, rather than shareholders, allows us to prioritize what matters most—our customers. We take a long-term perspective to every decision made, putting our purpose over maximizing profit.” John Spedan Lewis, the founder set out to be a force for good, and set out the principles for how the company should operate and produced a written Constitution to help Partners understand their rights and responsibilities as co-owners.

Steward Ownership in the USA

In the US, the best known example of steward ownership is the company Patagonia founded by Yvon Chouinard. He gifted the voting stock of his $3 billion company, Patagonia, representing 2 percent of the equity, to a purpose trust (and paid $17.5 million in gift tax). He gifted the nonvoting stock, representing 98 percent of the equity, to Holdfast Collective, a 501c4 organization. This illustrates three aspects of business ownership that are needed for any intending founder of a startup steward ownership business:

• The right to extract economic value (dividend right)
• The control right (voting rights)
• The right to sell, transfer or destroy it.

Chouinard’s letter creating the new ownership and voting structure is best understood by reading his 2022 letter explaining it. The letter’s first paragraph encapsulates it all, “If we have any hope of a thriving planet—much less a business—it is going to take all of us doing what we can with the resources we have. This is what we can do.”

Startup Steward Ownership is a subject at the heart of the spirit behind the Venture Founders website.  You can also read more about issues that impact Startup Steward Ownership at:

• Movement for Business Purpose
• Startup Growth on Purpose
• Startup Purpose Is Why
• Purpose Driven Startups Challenge Accepted Wisdom
• Mission Driven and Purpose Capital Directory—USA