Banks
Right alongside stock exchanges stand the mega banks, the "too big to fail" (or more correctly "too big to exist") institutions who inflict enormous harm while pursuing their own interests.
They now appear to be primarily focused on their profits and are rarely fulfilling their mandate of providing the loans needed to keep our economies afloat. Such institutions may benefit their owners, managers and a limited number of others, but certainly not Main Street.
Private equity/venture capital
Small business is the engine of job creation around the world. The U.S. Small Business Administration estimates that over 70% of all new jobs are created by companies with fewer than 20 employees. If one of our chief goals is to nurture job creation here and around the world, we need to ensure that money is available to those small businesses.
Anyone who has tried to start a new company, needing capital to survive and grow, knows how incredibly difficult that task can be. Our outline of the Conventional Funding Model give a good feel for the challenges entrepreneurs face in trying to raise funds.
If we are to change that paradigm, we need to come up with another way to get capital into the hands of those entrepreneurs. Because we cannot ignore the issues that cause these funding difficulties, we have developed a Breakthrough Funding Model for Small Companies that provides a means to bring substantial amounts of institutional funds down into local, small companies while providing solutions for those institutional funding sources that address the key problems of the conventional funding model. While we have built this program to specifically fit our CEED Program, the system has universal application.
It aggregates a large number of investments in many small companies into a common entity that is able to go public, thereby providing participants with the means to extract their investment capital without having to liquidate or sell the small companies that received the individual investments. At the heart of this approach is the idea of power in numbers, implemented in a structured way.
Corporate cooperatives
Our unique funding model contains a key ingredient that can be a solution for another class of companies existing small and medium sized companies who either need more capital to grow or need a means of allowing their investors to get their investment back with profit. Like the CEED Program, it aggregates multiple smaller companies into one or more larger ones, all built from the ground up rather than the top down (the current dominant theme).
We call this model "corporate cooperatives" in that it resembles cooperatives, which are normally a collection of individuals in some joint effort, but in this case the individual units are individual corporations who band together for their mutual benefit. Like individuals in a cooperative, each corporation still maintains their individual identity, but realize greater power and capabilities by joining forces with others.
Cooperatives achieve critical mass and effectiveness by the aggregation of many individuals in such institutions as credit unions. Corporate cooperatives are intended to provide a group of smaller corporations a similar critical mass in the one area where they individually might not survive and succeed on their own being a public company.
Public companies often wield far more economic clout than their private counterparts, primarily because they are able to access much larger amounts of funds, and usually at much lower cost, than private companies. That is because owners can freely buy and sell their ownership interest (shares) in those companies through the public stock markets, whereas the owners of private companies are very restricted in their ability to buy and sell their shares. Corporate cooperatives give the owners of those smaller companies the ability to own freely tradable shares. See Corporate Cooperatives for a more in-depth exploration of this concept.
Base of the Pyramid (BoP)
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