Oh no, I have a 14 year old. Yeah, yeah she's 14 and you know she's like a cat she can she only comes home to be fed she wants to be left alone when she's at home and prefers to be in a warm cozy corner so you know I have a cat it's good
let's as we catch up still, yeah, because everyone is quiet in the fall madness as as threats as replaces. So she's they want to maybe or they want to kick off the conversation we left off because the time is flying.
Time is flying here. Yeah, I think who started this meeting? Who who could be this today and what was your What was your immediate What was your What was your purpose?
Yeah, we've been currently me and soccer have been currently in conversation around having 717 Academy join as a education partner. So that's a separate partnership we've been discussing, but I think Sasha had some questions about his involvement in the German capital collective what is involved in the design process? what is expected of partners? I I'm so new to the clicker process. So I'm going to get to Astrid to just walk us through what's happening there and what are some ways that his team might be able to get involved?
Got it? Yeah. And maybe I'll do the sort of general overview of how we think about capital ecosystem design and and then we can maybe drill into the what has been happening with our German endeavor and looking to you if Guinea but of course you've been on parental leave. Maybe that's that's the answer. We have not progressed super fast and super far yet. But to give you a just a grounding in how we think about mobilizing capital for zebras, right, so we get asked a lot, don't you just want to create another investment fund? Right, but where can I invest? How do I invest in zebras? Is there a zebra Fund and the short answer is there isn't. Because there isn't one type of zebra right there. Zebras come in all different stripes. They might be cooperatives, they might be venture fundable companies, they might be nonprofit organizations, right. And so what we what we figured is that and also they have different growth trajectories have different different ambitions and different interests and how they want to grow and how much ownership they want to retain for the founders. Some want to change, share ownership with everybody who's participating in creating value. Other people just want to maintain the optionality of of a single founder or a small founder team. So the long and short of it is the problem of finding or mobilizing capital to zebra companies is a many to many matching problem, right? Because there are many investors who understand they don't want to invest like venture capitalists do and they're not a bank, right? But then in between those two extremes, there's a lot of a lot of ways you could be investing, right? So we're not ever going to just create the one fund. Instead, what we what we felt is and also there's a lot of interesting innovation already happening all over the world when it comes to figuring out how we can support interesting, purpose driven new companies. And so where we have found a really interesting niche as an organization is you know, to say, because we have chapters everywhere, like Berlin, right? We can actually just be responsive to what we're hearing in a particular ecosystem, right. So it could be a particular geography and or a particular industry and or a particular demographic. And so then we have to pilot it now in a number of those intersections and those ecosystems, a participatory approach to unto interrogating what the challenges are from the entrepreneurs perspective and what the challenges and interests are from the investor perspective. Right. So we're looking at both the demand and supply side of a given capital ecosystem, and then work together over a you know, three to nine month process to figure out what what some new interventions are that might be useful to mobilize more capital into these purpose driven companies. Right, so for example, here in the US,
we looked at we're just finishing up our most recent one, I was talking about the inclusive capital collective, and you could find that online. That's sort of our flagship endeavor in this where we where we work with black and brown fund managers in all over the United States. So the industry in that case is the financial industry itself. The demographic is black and brown underserved fund founders of capital businesses, financial businesses, and the region is the US right? So that's, that's our flagship example. We're also just finishing up a process in the collective ownership space. So generally, right if you're whether you're an existing Co Op, or you want to create a co op, or maybe your business could be converted into collective ownership, you know, through an ESOP mechanism. On exit to community, there's very little capital that can be found. So we're currently in the process of finishing up at this design phase, working with the National Co Op bank here in the US, working with a family office, and working with one of our co op members as sort of core partners to anchor this participatory process that has been going on for now about nine months, and is slated to wrap up by the end of the year. This this phase of it. And what comes out of the participatory process is usually a at least one but more often than not multiple ideas. For financial products and a platform that would deploy them into the ecosystem. Right. So in the case of the inclusive capital collective, the platform actually ends up being a financial cooperative. So we're literally creating a financial institution that is owned by all these black and brown financial innovators. And it is the co op this new financial intermediary that is creating three core products a credit enhancement facility that will be accessible to its members, a re granting facility that will be accessible to its members. And a very interesting but very peculiar to the United States instrument called new market tax credits where you basically we have a way to organize the ICC members into a pipeline of a tax credit incentive scheme that the US government runs to basically encourage investments into underserved economically distressed communities. Okay, so that's roughly the landscape of how we go about this and you can hear it right like so in the ICC. Our core partner was an organization called Common Future and another organization called Colorado lending source. In the case of the collective ownership project. The the core partners are literally a bank National Core bank, a family office one project and then one of our members member organization, second Muse is actually doing the facilitation. Right and then each and then just to conclude, you know, so we have this inner group of the core partners, then we have a larger circle of stakeholders we interview as part of the discovery process and then there's sort of a group of people sort of in between the two with a very small and a very large group. Those are core contributors who have technical expertise that we might want to contract for, for example, to help with the financial engineering of a particular mechanism.
Okay, but if, if we want to set the similar thing up in German, correct. That's where it all seems so big and since I'm not you know, a banker, it's like, you're talking to me like a doctor talking about operation you know, it's like, okay, this is dangerous and where to start? I mean, what's the first step?
Yeah, the first step is a bunch of us getting together to say we think there's a problem in this capital ecosystem, right? Not enough. Right? So you can do Yeah, well, and we have done a version of this when when I was in Berlin in September. So we have the basic buy in that. Yes, there is there is a problem in the German startup capital ecosystem.
Maybe just one point I think where we probably cross paths because such a you like with all the stuff you're doing. Like, not on the team is very crazy. But anyway, you are focused on collaborating Polanco code, and I think the problem that we're facing right now is on a meta level that everyone is doing something in this echo system, but it's not collaborating with each other. So there are actually layer three advisors, they're all doing something because creating a nonprofit funding platform and, you know, centers doing something social entrepreneurs, impact investors and some private startup using AI for investing. There's so many innovations happening but there's no real overview of corporation so if you if a new zebra startup comes to us and ask for it, okay, so hey, do this like where do I go like because you told me it's possible to do a zebra setup. For hardware do it, then we like okay. So he is this content, but actually there's no real. So what we want to try to create is like, what's the overview and where to go and it's actually more than an overview of investments. I think it's really more about innovation in this practical market ecosystem, and who are the players who want to do it together? That's the things more about collaboration. It's not about the individual instruments like yesterday, we had one event you introduced this to workshops, but then we'd run this event where there they were surprised that this thing exists, but everyone said, we're going to learn and then that's what and then basically, again, nothing happens afterwards. And women is doing what they're doing. We're doing what we're doing and everyone else is the same. And that's kind of what we want to change. And that's why I think we want to talk to you. It's more like how do we strive or how do we drive this collaboratively? That's the goal we have. Do we create something like a call or do we create that can Germans can also shop you name it? What do we need as a solution? But we first need to understand what is the problem on both sides and what are the players that want to solve it together? And otherwise, we'll probably be approaching everyone from our own side and the main thing perspective so something will happen no matter what we do, if we don't do nothing. I still think that thing. We'll move on.
Yeah. Yeah. Yeah. So what we have, what we discovered is that by basically proposing a collaborative process of participatory process, right people who are active in this capital ecosystem, like the workshop to bank, they can, you know, all we're asking of them is Do you are you able to come to a few meetings? Are you able to sit for an interview in the discovery phase, but there's a core team that drives a design is basically Human Centered Design applied to capital instruments? Right? That's basically we're basically saying we need to design the missing products and missing plumbing in the capital ecosystem. And we're doing it in conjunction in collaboration with interested members of that ecosystem, you know, like the bank. Okay. And then and then at the end of the process, right, the idea is that we have a number of investment propositions or products for example, you know, with the bank, they need pipeline, right and they need in they need they need a pipeline of deals that are ready for their product. They're not building that pipeline, somebody really should build that pipeline, right. So that may be a recommendation coming out of out of the design process is not just oh, somebody should build the pipeline, but oh, here are the four or five organizations that will actually take on that infrastructure work.
Okay, I say, at the end, I think someone will need to fund this. I think we we can imagine, for example, someone like virtual Berlin or someone else might be actually interested in funding it someone does a good job, because they're not like, you know, it's not their natural talent to like, run such a process, inclusively and human centered curriculum. They're more coming from Senate perspective and financing and, you know, like politics. That's what they've done and I think it's great that they started doing something and so what we can do is like we what we tried to do is to form a team here on the ground. And you know, at the end of the run, if you have a capital loss, we initiated this process last year. This year, this year, sorry, my year so a little bit off. Time is flying I think it was still this year, and some are so we had a few salons tested and I think this is close to what you're doing with your community already. I was just wondering, like how it is right now because I've been there years ago, I think last time during Corona still. So it was very similar. In fact, respiratory and you ask questions, people introduce themselves and I think this thing we could do with some, you know, really interesting founders, from our community from your community, but we can also invite the other side investors kind of run out of fuel such a few steps along so at the end, that's what will be happening if we partner up and someone will fund it just ensure to the workers somehow being able to be done because we don't expect people who were doing this to do it for free. Yeah make him have to be kind of somehow paid but it's not about money. It's just ensure that people really feel commitment and it's possible to have work to
do but to organize the Long's meet network meetings with interested parties. That's our daily job. So exactly. Yes. Would be good to have, you know. compensated. Yeah. Which we're not talking about a lot of money. You know, my team doesn't kill me for putting another project but this is easily organized on time, people from private investors, institutions, and so on. We can organize. And we just one sponsor to give us a few codes of jurists over the years. So this will not be a big book and just trying to claim, you know what to start with. We just have to get into going.
Yes. So the way we usually start is we find a few wheeling core partners, right. So some of us have to now and then what we do is we write a concept paper, and we put it in front of some funders, funders and sponsors. Right, and the whole package, you know, the whole process from this moment on to all of us, you know, offsetting our time to bringing in a facilitator who can who can do the content design for the meetings, right and drives the process forward. You know, discovery and eventually getting into financial design etc. The whole thing is probably on the order of 250,000 euros.
This is what you wrote, right? I think that is it. Yes. Check the details. What if we don't find those? What do we do that?
Well, I like to sit in a corner and cry myself. So far, it's been it's been shockingly easy to find the money for these. So because the unique proposition here is that we're working with a group of people who all understand the problem but they're all touching a different part of the elephant, right? It was a different part of the zebra right?
The dinosaur Exactly, exactly. Well, and dinosaur is actually a good a good analogy here. Because everybody is stuck in the legacy systems. Right? So our friend at the bookshop, spunk he has one way he can imagine making an intervention. And, but it's only one and it doesn't work as part of a portfolio right. So when we so the our our experience has been if we can get a few sort of charismatic leaders in the ecosystem to say yes, this is an interesting problem we want to all participate in. And we have a small handful of core partners who say and we're going to put our name on it and and really make this goal, right really take responsibility for holding the container. Then we can turn it around to actually a bank and say, will you sponsor this this work? Right? Like that's what happened here in the States, for example, that the National coal bank said, we really need to figure this out. We don't know how to figure it out. But here's $100,000 to figure it out, in this really interesting, participatory process that you have described, right? Because the financial institutions remember, they're self interested, right? Like Peter wants this pipeline, but he doesn't know how to do the r&d to get a better pipeline pointed at his products. Yes,
I think that's that's the caveat. That's why I would suggest just in a matter of focus and perspective is to focus actually on Berlin first, maybe a bit more. Close to what Sasha has in mind networks are but I mean, we're not fully focused on Berlin. But of course, you know, Berlin is the highest, the highest density of the network that we have and I think the dark place virtual spotlights are financial players, but we are focused on Berlin like investing country then IBP right? They all might be the targets are such, basically just to do that, later on. They have some like the most impact oriented ones they have, like city wide focus, and of course, nationwide play like they leave the nation we talked for quite some time. We can of course talk to one of the projects in W Phoenician is the big, but this is like taking too long. My suggestion would be to kind of start with the pilots in Berlin, get maybe even smaller. If we don't, maybe you don't meet them as much capital. So if we use the existing structures, maybe 50k already enough to start that out.
Yeah, I would, I would caution against that. So one underestimates how, because we're getting into the design of actual instruments, right? And that's not cheap. Right. So in each of the, in each of the and you also want you're also paying for good facilitation, right for facilitation that has a point of view around capital instruments. So it's, it's not possible in my opinion, to do it and fits and starts, right. So we want to put the whole package in front of funders, I think a geographic focus could make sense. Right? And you can you can always invite people from other parts of Germany to meetings in Berlin, but then position it, to the extent 111 of the things we find is that there are frequently very interesting government programs that can be leveraged. Right and of course in Germany, a lot of those government programs are fractal right they work in each of the lender. And so from that perspective, you can have you can have your you can have your Berlin and eat it too, right. Like you can have here. You can you can solve it for Berlin, but solve it for Berlin in a way that actually paints a path for the rest of the country. I think that's how I would frame that. And the rough, the rationale roughly for for how we have positioned these processes in the past as if a private investment fund wanted to create a new fund, right, they spent on the order of 250,000 euros in the creation of that vehicle. And what we're saying is, it's roughly going to be that except it's not one person sitting in their office, you know, trying to create this thing and will it into existence. We're using a collaborative approach to come up with the right instrument.
You know, what let's look at the more German the German is trying to start because now we can discuss if we do the big ones, small one, whatever, but this is, this is getting boring. Boring. Let's start. I love this one so we should follow her expertise because she is the most experienced in that. So okay, let's just try to do this. So, what to do?
So I thought I'd say I always do what she tells me to do. Well, I think I mean, trivially, right, like the first thing we want to do is actually just paper and arrange an agreement between
you at New Mittelstand and zebras unite, and we can do a four way agreement or we can do it in like individually, but the basic idea is here are the three or four partners who say yes, we're in we're creating the container we're taking responsibility for making sure everybody who puts serious time into it gets paid right not just your team, right but you know, if Gainey needs to make sense for his time it needs to make sense for our time with TLC night right? We have two Co Op members who facilitated these processes before. So we can sort of plug in some existing capacity. So the first step would be, let's come to terms on the agreement, which roughly says we're going to try it. We're just going to do it. And we're going to take I mean, that's literally the extent of the agreement that we agreed to just try it, and we're going to put our names and logos on it and we're going to put a concept paper in front of funders. And when they say yes, our group of core partners takes responsibility for running for running this project. And you know, your team conveniently has wonderful meetings that you know, how to organize. You have local partners, right and local venues.
You know, and then we can worry about how I get myself to Berlin more frequently and that will be a very good problem to have.
We have a correct so we have a running list and we can see we have a bit of a hub hub for this project that we can share you on Sasha and you'll you'll see we have a we have a we have a point of view and on who some of these key stakeholders are already.
Okay because then, you know, we can always call people male people forced them to come correct. Yeah, yeah. Yeah.
Exactly. So I think the next step of course, is to step out. We just review this paper that we already have seen as to draft right put the logos in there. And the only open point is do we take any more partners in a core group group before we put it in front of others, or do we just start pitching it directly to founders? That's the only complaint. I have
a statistic. What do you think?
Well, I would I would love for the Berkshire of spunk. potentially be to be a partner on this. And I like to ask them
also would be good thing to know if any you were speaking up, because I'm following up on the events we had yesterday. Already already already should run some programming. So great thing, it's a good potential there.
Yeah, just feel free to man. Let's
put our logos in there and I will just set to take them after they've done that and, you know, was well received. Let's just move on. And I already mentioned that yesterday.
Perfect. Great to see any if there's any paperwork already booked with you to put that together.
Great. All right. Great. Thank you. Thank you. All that was a very, very effective meeting. Have a great day.
