Taking inspiration from the article of the same name and a person who is heavily involved with those very 'Zebras', this week Fiona speaks to Esme Verity about her story and among other things her involvement with Zebras Unite. Listen in to find out more about what it means, why zebras fix what unicorns break and how magical thinking drives the startup economy, but we need a strong dose of reality.
Esme Verity supports founders, those who are 'Zebras'. The insights she shares throw light on to a world which favours a cookie cutter approach to success, even within the area of start-ups where our expectation may be different. Fiona explores Esme’s journey and the interesting experience she’s gained on “building a business that doesn't fit into this mainstream mould that we now have, a sort of Silicon Valley mould.” Why by investors looking only for businesses that offer a 10x return on investment leads to so many startups that are critical to the world being disregarded and left struggling to survive.
Esme ran an antique jewellery business from the age of 18 and throughout university. When she left, she sought funding to help grow that business, and that’s when she was thrown into the world of Venture Capital. The VC world is very much focussed on finding the next unicorn business, something that’s going to grow incredibly big, very quickly. But Esme explains how she thinks that this reflects ‘a very limited definition of ambition’ and just ‘because you don't want to build a huge giant business doesn't make you not ambitious, it just means that you want something different.’ Wanting to do things differently and support the diversity of people within the start-up world, not just the unicorns, Esme has been on a mission ever since to advance her understanding of alternative approaches to growing a business that’s sustainable and to share that knowledge with others.
Esme teaches about alternative funding and has worked with hundreds of purpose-driven start-ups, non-profits and governments to help democratise access to alternative funding sources. Prior to founding Considered Capital, she was Director of Chapters at Zebras Unite, an international and intersectional hybrid cooperative dedicated to creating new financial instruments for the next economy. Esme is an active angel investor and was named one of the Top 100 Women in Social Enterprise by Pioneers Post. Esme is the founder of Considered Capital, a platform for start-ups and organisations seeking alternative funding. Considered Capital simplifies and speeds up the journey to finding and accessing the right funding fit through courses, community and content.
To find Esme go to Linkedin or her website Considered Capital
For more from Fiona and her startup Oka click here.
Fiona
Today, I'm thrilled to be joined by Esme Verity from Ghana, which is quite exciting, it's a bit more tropical than what I'm looking at, in, in the field, English fields with the grey sky. But
Esme
Yes, and also, we are very differently dressed. And we are very different. I have almost no layers, and I'm trying not to try to keep myself cool. Whereas you're trying to keep yourself warm.
Fiona
Yep, I've got my polo neck on. And I've got my heater on in my little hat, which is, which is all good. So as May I bumped into probably so it was probably I was reflecting on this, it was probably through Laura Harnett. That's probably how I sort of saw you on LinkedIn. And then I started taking interest in what you were posting. Because it's interesting, but it's about, well you come at investment from a very different angle. And I have since learned a lot more about you and about how you come at investment. But for people that don't know anything about investment, and they're like, oh, goodness, what's this about?
Esme
So, startups, everyone find startups interesting in some way, shape, or form, and startups fulfil so many different roles within society.
Fiona
And particularly now, I think there's far more concern with social impact startups, but you've got startups who are doing this great for the environment, mental health, some are just really cool tech, some ed tech. But for all of these organisations to be able to grow, they need someone somewhere, to inject cash into them. And obviously, you could grow in a sort of an organic way. But it takes a lot longer. And it doesn't necessarily allow you to get the market share, or if you're doing something innovative to have that investment to create something new and different and breakthrough and cutting edge. But there's a big sort of dark cloud over what venture capital is like, and are they not very nice people, which isn't necessarily true. But there's also they're not the only option. And I think that's where you come in, for me because you opened my eyes to all sorts of different options, all sorts of different ways of looking at investment. And, what interests me is not just that it's not just the innovativeness and the side that an everyday person might not even be aware of. But it's the fact that you became interested in doing what you're doing. That's what I also find really fascinating. So I've prattled on for quite long enough. Tell me a bit about you.
Esme
I'll tell us a bit about you. Yeah, no, that was all wonderful. And certainly a nice sort of like, lead to exactly what I do. And I essentially, I've been sort of working in the, I suppose startup Tech for Good social impact. When other words were using that type of space for maybe sort of 10 years. I started off with a very different business. It was an eCon business. I was quite young was about 18. I launched it to help me get through my university years to fund part of that was vintage jewellery. into jewellery. Yeah. It's a really into like, antiques and vintage jewellery is a really interesting market, but is a bit of a segue. It's basically 85%, 90% women really just running like really big and successful, profitable businesses. And often the men have some sort of security. And they help the women. That really is it's a, it was a quite empowering place to grow up in and watching my mum build that type of business and be around other people that were women running businesses successfully. And no one ever said, you know, said anything differently. They were like, yeah, obviously, we're doing this, like this is our business. So then, when I got to university, I was like, 'Well, yeah, obviously, we can all do this. We can all run these profitable businesses, it doesn't matter about our gender or background.' But then when I kind of graduated, I joined this entrepreneurial programme was very good at the time, and I realised that actually there's a lot more barriers there. And I realised I'd grown up in this kind of like very empowering bubble. And then I got to this programme. And everything was very difficult. And everything was very different, particularly when it came to funding there. Like a lot of people trying to push me into building a different type of business that would fit venture capital instead. So this more traditional type of funding, equity based funding from institutional and that type of funding requires a certain type of business, it requires you to work be in a huge market, it requires you to scale very quickly. And it requires you ultimately to reach a huge size where you'd be valued at a billion dollars. So the likes of Airbnb, the likes of Uber, all of those types of businesses. And I was like, 'Oh, wow, I suppose if that's the business that if you think that's what I should do, then let's, let's do it. And, you know, cutting a long story short, I ended up wasting maybe a year, year and a half of my time, everyone else's time trying to build a business that wasn't actually scalable. We could never hit that level of size. And I didn't, I didn't inside, internally believe that, I wanted it.
Fiona
I think that's the interesting thing, isn't it? Because when you're talking about the women that you grew up around, and how empowering they were, and how empowering that environment was, they weren't looking to set up businesses that were going to sell for a billion dollars or be valued at a billion dollars. They weren't looking for that exponential growth. And it actually works in opposition very much to women. Not all women, but women who potentially some women, a lot of women, I would say from my experience of what I do working with leaders are less ambitious. And that's not a bad thing. They are more comfortable having a business that's sustainable, and it keeps itself afloat, and it keeps going. They don't want to grow it by seven times within the next year. And if you've got children, it's and you're working mom is incredibly difficult to fulfil that venture capital model. But I think what you're saying as well as it just wasn't what you wanted. And you were kind of being shoehorned into something that wasn't the right fit for you. But it was what the expectation was, if you're an entrepreneur. This must be what you want.
Esme
Yeah, yeah, I think I think it's, I think if there's just a very limited definition of ambition, I agree with you the most, because you don't want to build a huge giant, you know, business doesn't make you not ambitious, it just means that you want something different. And you've recognised that in yourself in what you want. And in your aspirations. And it's so ambitious, I mean, to be able to build any type of business is hugely difficult, and to actually focus on revenue, profitability, and something that can be sustainable, and to last a long time, is now seen as quite practical, which seems, you know, seems a little, you know, because we've gone so far down this venture capital road, that a business that sits in the middle is not is not seen as ambitious enough yet, like you could be, you know, it'll make a six figure business.
Fiona
And I'll push you to be more ambitious. Well, how should one wishes you ought to be. I mean, it comes down to that proverb doesn't that I will not repeat it correctly, because I can't even tell a joke correctly. But it was about, you know, there's a guy sitting on the riverbank fishing and someone comes along and says, 'Well, why don't you, I don't know, get a boat and get more people to help you fish and do this and do this.' And the guy does all this stuff. And actually, he ends up miserable because what he enjoyed doing was sitting on the edge of the bank and fishing. And it's another thing I gave a talk to some uni students yesterday. And I was really hesitant to use the word 'success' because the way people define success, so success isn't getting a first necessarily or getting or A grades. Success is feeling fulfilled. That's what it means to me. And I'm really careful in when I'm writing in trying to define success for yourself is massively important. And that could be having a beautiful garden. It could be having fantastic friendships. Or it could be building a business that scales and sells for a billion, but it's different for everyone. And I think we're not necessarily given permission.
Esme
And more broadly by society say, what's your definition of success? How do you fulfil that for you? Absolutely. But I do find that actually, I have don't like to generalise too much, but I think women are much better at that. It's harder for women to get past all this, like social conditioning. But I think we are better at actually figuring out what's what might be right for us. Ultimately, like, those are the types of people that I really find incredible. And I find drawn to those people that are like, No, I know exactly what I want, you know what I want a sustainable six figure business that's going to help me live independently, it's going to help me I don't know, travel, it's going to help me bring my children, it's going to help me not be reliant on anybody else. So why would I want to do anything beyond that, like I could, perfectly capable of doing it, I just choose not to. And I think that's a really radical act these days to be so self aware, to do that. And I think women have that ability, much more than men to be that self aware, we do more of that work on a much more, you know, emotionally aware, I think of our needs, we might not be able to, you know, achieve them because of you know, barriers, but we're at least aware of them.
Fiona
So interesting. And interesting. Can we just quickly dive back to what your topic was for your degree?
Esme
Yes, my topic was so niche, I did a degree at UCL in the history with an almost exclusive focus on Jewish history. Which is not in any I've not, I've not used it at all, obviously, in what I do. But I've still I love it. I read about it all the time, like 10 years later, you'll find me now like, in a book, reading my Jewish history, or find me watching all of the shows on Netflix about Jewish history, I think I'm possibly the only person out of my friendship group from UCL still, absolutely loves their topic, because I don't think university needs to be about, you know, unless you're doing a vocational degree, which like medicine, or law, which is vital for your career, those things can be very different. What you do at university as an exploration of is that joyful, for some people, you know, only time in their lives where you can just learn and be curious. And I chose Jewish history, which I think is fantastic.
Fiona
And I think, you know, given and correct me if I'm wrong, but you said it's not because you had Jewish heritage, it was just an interest, not just, it was an interest that sparked a real passion in you. And that shows a really high level of self-awareness for someone who's 18 to search out the one course in the whole country that did that. And to know that that was okay, you know, you gave yourself almost permission to say, I'm passionate about this, I'm really interested in it. So that's what I'm going to study.
Esme
Yeah. But I also have, I think it has to be said, I have very supportive and maybe enlightened parents, particularly my Dad who is, was just like, ‘Do whatever you want, as long as you end up with some sort of financial independence and stability’, i.e. you're not dependent on me. You do what you want, whenever you want, like, whatever degree you want to do, don't go to university do go to university, you know, study, not study, travel, do what you want. Just make sure it's your choice, you're not being pushed into it, because someone else is telling you this is a good idea. And that, you know, gives you permission to explore things that I think a lot of our parents would have gone I was gonna get into a high-risk situation and putting one university of your UK application well.
Fiona
But what's interesting as well as is that what you're helping to do through the courses that you run, which we will come on to in more detail if that's okay, but you are under the umbrella of your own experiences and helping people to connect with what matters to them, and giving them permission to pursue the options that they have chosen. And even if that means, do you know what, I'm still going to take investment from VC, but now I do it with my eyes wide open. And I know what I'm stepping into. So, the passion is that helping people understand that. So from, you did a year and a half where you felt like this was, by the sounds of things, correct me if I'm wrong, draining the life from you, when you were trying to pursue something that just didn't fit with actually what you wanted to do? Or how you wanted to do things? Were from there until now? What's been going on in your life?
Esme
Okay, that's quite a big, big question. Yeah, I suppose if I'm following this interesting thread that you are trying to follow that perhaps I've never made those two connections in terms of following my own pursuits, and helping other people do that. That is interesting. Yeah, I suppose I went, you know, if we take that idea that I've always I don't know, been in pursuit of something, right. Which is like, my sister would always agree with me. She's always like, you're trying to do something, you’re not sure what it is, but you're pursuing it. She's very different from me. But, uh, but yeah, I suppose it was I was doing, I did that after my programme, which I think was very good and very helpful piece of the puzzle. And knowing a lot of it, I think, is when you're young, it's just knowing what you don't want to do. Close some doors, I think is extremely helpful. Or then, based on that experience, I shut down that this is my sister still running it. So still a very successful business, and she is far better at it than I am. And she loves that. But yeah, and then I shut that down. I went and worked at a couple of VC backed businesses, you know, the, sort of expose the, the arguments or the point of that the objective of that was to see, well, if I couldn't raise this type of funding, which seemed to be the only funding available and the only type of business I could build, what would it look like to work in that, that's as close as I can get, and see what it means to work in a business that is VC backed. And that experience was enlightening. I worked at a variety of different VC backed businesses. So, I looked at what I worked at one that was sort of a b2b hospitality business age, sort of raised a small amount of funding, but had a niche project, very niche product, and trying to sell basically a SaaS product into hotels, which proved very challenging, because hotels are very slow, and sort of behind the times in terms of the technology that they use, and their interests. And I'm particularly forward thinking, , but it was an interesting place to be to see what it might look like to try to challenge an industry in a market that just wasn't moving. And they're still running. But it was, you know, a real, real challenge. And I was like, ‘Well, this amount of money is not helping them. Like, that's not the problem. They've got money, but they can't budge. There's something else going on here. There's an ecosystem that's not moving. And it's going to take somebody much bigger on board to move this.’ And well, this hasn't really answered my questions. I worked on something somewhere else that was a FinTech product, trying to support the unbanked, so gig workers, so people like delivery riders, things like that to help them access, better credit. Really interesting business and it has the potential to have a huge impact in the market in terms of radically changing how banks actually offer credit to these, this particular group people that they just don't trust and don't know how to deal with and they raised I think, I think when I was there and it'd be 1.5 million. But you know that, again, didn't really solve their problems. It was then just like, ‘Wow, we've now got all this money, we've got all these investors, how are we going to keep growing?’ And you can see the inside of that of the struggles. I mean, there were an incredible team doing incredible things with very little resources, that it got me thinking, ‘Well, is there another way to actually, to do this, that doesn't give you all of that pressure.’ And maybe you don't need to grow really, really big to have the same impact. If you move slower and work more with a group of that you're trying to help. And those sort of experiences led me to just again, like, I didn't have the answers I was looking for, I was like, I have not come closer to solving this question of like, how do you actually build a business that doesn't fit into this, you know, mainstream mould that we now have a sort of Silicon Valley mould? And then, just because I kept talking to everyone and just being like, ‘Come on people, what am I in?’ friends led me to an organisation called Zebras Unite. And that was really just what changed everything for me. I was like, I read the most famous article, which is called ‘Zebras fix, what unicorns break!’ And I was like, yes, there we go. That is what I have been thinking I've been trying to articulate here is actually a whole community of people that are questioning this whole unicorn concept. And the guy actually, what would it look like to build zebras, instead, this other type of business, that still want to make money, but they want to do it in a way that balances purpose and profit, that brings in their community into that business in a much more integral? In a way, you know, that your stakeholders value them, don't be extractive to the people that are helping and supporting you. And then I was like, right, here we go, this is what I've been looking for. And I sort of got involved in whichever way I could ends up being like I said, it's just spoke to everybody. And somebody noticed me know that much, but I am here. Yeah, I think without them, I'm not sure where I would be. It's one of those, you know, one of those moments, which are absolutely vital to how you move to where you've got to now is knowing that actually, there's a huge movement out there of people that are all looking at what is the possibility outside what currently exists? And it's very exciting. And all sorts of interesting ideas. And then from then I think, because the tcapsule sort of came out of that journey of being like, well, actually, these people do exist. But in terms of funding, that piece of the puzzle isn't quite there, because it came from my own experiences of being like, where's a way of funding roadmaps or anything differently? VC, it's easy, not easy to get it, but easy to work out how you might get it. But anything else? If I want to invite my employees into my business and make them owners? How would I do that? How would I fund that? Would it be a co-op? What could that look like? And those are the types of questions that are coming out and people in that movement. And I was like, why? Well, let's try and see if we can make a dent in this space and help people go from A to B in terms of this is the type of type of thing I want to build that may or may not exist or be possible. How could I, you know, sort of travel this wiggly road to get to something that is, you know, potentially fundable, or at least drives revenue, is sustainable, and makes an impact in the space that shows that we can do things that are very different. And people have got there and that's I suppose, very happy.
Fiona
I’ve got a lot of questions. So first question is what were your roles in those first, the b2b Hospitality and the financial models sorry, not the financial model the providing credit for people who, typically gig workers and what have you what were your roles within those two companies?
Esme
Oh yeah, I forgot to say I actually am a marketer. So all of these things I was always I liked, I liked words, I suppose. And, you know, at the beginning of your professional career, when perhaps you've done a degree that's not transferable, people see you as a humanities person, and they think, ‘Wow, you can write essays.’ So it becomes quite much easier to transfer that skill. And people then put you in a bucket of like marketing, when we all know marketing is extremely difficult, extremely varied. I recall, writing as a tiny sliver of a big mix of huge amounts of skills. But yeah, I ended up as a, as a marketer, as b2b SaaS business was actually a placement as part of this entrepreneurial programme. But because it was so small, there was three of us there was the founder, salesperson and me. So, which is exactly what I wanted, right? Like, I mean, I'm a generalist more than being able to do anything, you know, specifically that could. And it was perfect, you know, I had lunch with the CEO, every single day for about a year, he was a very supportive, encouraging individual, who was really honest about the things that were difficult. And I think, you know, truly believed that maybe I could have something to offer, which I think is really, you know, important when you're so, so young, in a space where there's so few, you know, in an organisation where you have such a few people, to, for someone to go, trust you and go, yes, please take over this. I redesigned our entire website. No, I really, but maybe that's the naivety of being young when you when you don't even know what you don't know. So, you truly believe that you can do these things.
Fiona
That's great. But it's interesting from with my geek hat on, you were learning through doing and seeing and discussing, which we think about and I don't want to go off too much of a tangent, but we think about the hybrid world that 20 Something year olds are working in at the moment, it's very difficult for them to be up close and personal to someone in that working environment. So, there's a lot of learning that is not going on. There's a lot of learning lost because of a hybrid working that. Anyway, I could take us off on a complete tangent, I don't want to, so you did that. And then Zebras Unite, tell people a little bit more about it. So firstly, I think the thing that's fascinating is that article you refer to ‘Zebras fix, what unicorns break’. Can you tell us a bit about that? What I mean, what does it mean?
Esme
I mean, that was their essentially, their manifesto is originally started in the US by four female founders, all with different businesses, all being like, we're building our businesses, the revenue generating, they're profitable. But we can't really raise any funding or are being like gaslit constantly in conversations, you know, by investors telling us that we need to be bigger, we need to be more ambitious, all of this language that ends up being like gendered and not helpful and you know that business you want to build, you know, your market, you just need some funding to keep going. And they wrote this manifesto, which was like a call to action for their businesses. It was like, there was a brilliant chart they did where it was like, this is the definition of a unicorn. This is definitely a zebra. Do you stand by these ideas of balancing profit and purpose? Do you stand by this thing that is real rather than a unicorn which is mythical, which is one of my favourite bits of it. So, it was like, the chance of you ever becoming a unicorn is 0.0 1% of the chance.
Fiona
There's also an authenticity to being separate, isn't there? Because I think you look at Theranos. You look at, I mean for me, so my wonderful, wonderful development team are in London based in WeWork at the moment, and I go into that WeWork and every time I can't remember the name of the guy who started WeWork, but I think, well, this is a guy who was just full of bullshit and who managed to build something mythical. Get investment into something mythical, but the worst of it is now after crashing, he’s gone on to raise again, because it is this almost like a game where people are betting on the person who's got the loudest voice, or who can make up the best story, rather than it actually being something real, sustainable, authentic. And that's not to put that because there are wonderful companies as well who get investment. But there is a whole load of bullshit. Now, like, I'm not, I'm not saying that VC is bad. I absolutely don't think that, I think that it's a necessary type of funding for a very small number of businesses. I think, within VC, there are some very good players and some very bad players. And we look at the stats around who gets invested, who gets sort of like venture capital money, and it's like, I can't remember like 2% of women get venture money.
Esme
So, there's a whole problem just there, that there are people trying to fix it, like how can you actually? How can you change that world to make sure that more diverse people get the money that they need, rather than just investing in the same people who are offering the same products in the same markets? And even if you do something as catastrophic as WeWork, you still get more money, I said, everything was a perfect example, what's wrong with it? So, there was a whole movement in trying to make sure that there is better access to that money for those people that need it. There's also a whole movement being like, well, it's all about options, right? Which is that what you said at the beginning, it's like, let's fix VC. But also, let's fix everything else around other funding options, and building other types of businesses, because that's what we need for the economy to survive, we don't need a whole tonne of these unicorns. Because all you end up doing is building, you know, a whole tonne of businesses that are kind of similar, and then one of them wins, and all the other ones crash. Whereas we need all different types of businesses fixing different problems for, you know, more niche markets, right? Good amounts of founders that I meet that are like, ‘Well, I'm, you know, building this thing for, you know, a small group of people, it still needs to exist, it needs to be fundable. It can be profitable, it's just not in a huge market.’ How do we help those businesses exist? Otherwise, we just end up with a lot of businesses that are largely the same, but that apparently suit everyone, you know, like, all these businesses are this delivery thing? How can we get our groceries over faster? So, do we need like 10 of these businesses? Like how fast do you really want your groceries delivered? The market has not solved that problem. Whereas that money needs to go in riskier, we forget the venture capital is a risky category. So, they need to be taking risks. That's the point of it, investing in different things that might fail, but also might work and if they work, has a huge impact. And it can also make money but yeah, and particularly in this current climate, lots of investors are going the ones that have perhaps made some progress. And that's looking back and being like, actually, you know what, we're just gonna go back to investing in people that we know, you know, serial founders that have gone through a recession before has now become very popular, though traditional industries that they know how, you know, like that stretch really could look like and how they might get their money back how this businesses might be bought. We're not going in the direction that we need to be going in which is experimentation and risk, because that is what is necessary in this ecosystem to create a fairer economy and new ideas that suit everyone not just building loads of delivery companies so we can all have fast groceries.
Fiona
Yeah, and I think our world is dominated by. We know it literally, globally by big giants like Amazon, who a lot of people don't want to buy from. But then sometimes it's the only place you can buy something from but there's that monopoly, which means it's taken out other more individual or niche. Players in certain situations or niche players have to sell them through Amazon, and you just, it's just becomes this crazy. It's another example crazy game.
Esme
Yeah, they've just got, you know, unfortunately, and in lots of industries, it just becomes who's got the most amount of money, and who blows everyone else out of the park, which is not helpful. We don't need monopolies, we need somebody to be a competitor, really to Amazon, to hold them accountable to what they're doing, because Amazon is just going to crawl across it, they're already doing it, right. They're grabbing opportunities across new markets and going to push more and more people out of it. Do you really want Amazon as a corporation to be in charge? Again, you know, the investor bias, it's for certain types of businesses, we just need to make sure that they're investing in a variety of industries, and a variety of types of people. And there's some accountability for that. And there's definitely a sense from being someone fundraising.
Fiona
There was one VC that we met with, they seem to have the values in all the right places, which sometimes may say they do on the website, but when you've talked to them it’s different, but the CAGR the compound annual growth rate, which is how quickly a market is growing for people that aren't in this space. Our CAGR was on personal development, which made it too small because they needed it bigger than 10. And it's like, well, we could put it in a different market, because it could be edTech or it could be mental health or it could be. And then again, it just feels like you're playing this game. Because it's like, well, which slide do you put in, maybe if you put different slide in then. And it's just, it's just bananas. And it is a shame, because you've got an eye if I switch to my professional hat, think for years, I've assessed people for leadership roles. And CEOs, the best CEOs, the best leaders haven't necessarily gone to Oxford, or Cambridge, or Harvard, or MIT. Some of them haven't even gone to university. If some of them were told that they couldn't do maths, quite a few of them actually told they could not do maths at school, and they were going to fail in life. They left school at 16 at a time when you could leave school at 16. And they've not only been massively successful, but have often had a hugely positive impact on the communities that they serve. The way in which they make profits and value their employees. And the way they look after, I know there are some really bad leaders I've seen as well. But the variety of leadership is not what you would see on a checklist potentially from a head-hunter, for example, where you're saying, which university did they go to? Have they got an MBA? Where did they get their MBA from? Well, no, actually, they've done some really interesting things, they've learned from lessons in life. And they've developed and they've grown as a person. And it's a similar sort of thing, where we think we're talking about taking risk on a person as a leader or taking a risk on someone with high potential who might not fit the mould when you're hiring them, or graduate or someone who's not a graduate for a role. But my concern, I think, is in this marketplace, when everything is so, everyone's battening down the hatches, we become really, really risk averse, the way that leave women being invested in, people of colour being invested in, people with different sexual orientations being invested in was where does it leave all of that stuff?
Esme
Yeah. And that's why we need more innovative funding.
Fiona
So, tell us a bit about the innovative funding. So, we talked about VC as as a potential but on your course and anyone who's listening who wants to raise capital in any way, shape or form, go on Esme’s course because it's brilliant. We, you know, you've talked you've covered so many different options of how you could raise that, that funding that you need. And not only just how you can raise it, but then the structure it takes once you have raised it. So, it's a lot to cover in the last 10 minutes. But tell us a bit more about that.
Esme
Well to start, so yeah, I mean, you know, we've sort of, I suppose, trying to define venture capital, right. And this more traditional way of funding certain types of businesses, mainly tech businesses, but also some product-based businesses that require a lot of money, all of that. But outside that there's other options. Some of them, you know, more sort of simple and easy to access than others that can still give you funding at different points in your journey. So, I think often a misconception is that you will just raise one type of funding, very few businesses will only raise one type of funding, you have a variety of different funding types within your fundraising plan. And that might end up being right at the beginning, more of the sort of non-dilutive funding, which is equity free funding that is maybe more common and more known. So you know, something like grants, for example, you might do like, rewards based crowdfunding, something that early on enables you to get a chunk of money to experiment to explore, when you're at the riskiest point in your business, because you have no traction, and no revenue. So there's bits at the middle that are more known, it's a bit sterile, sort of like in the middle, that provide a little more sort of optionality that I will define as more innovative funding, if you know that you don't want VC, for example, but you do know that you need equity funding, you need like, you know, risky, capital, that's a bit more expensive because it, that'll give you a bigger chunk of money. What could that look like if you're not going to provide VC like returns on that investment. So, it could look like you we there's a movement around what's called a fair return on that investment. So instead of promising is going to be 10x ,20x that a VC needs for them all the work you do on actually, I'm going to provide you with a 3x return or a 5x return, it's going to be a fair return for everybody. So, an investor will get a decent return, but not a huge one, because then it means that other stakeholders within your business can benefit from being there. And the majority of that money will go back into your business, into your mission, to make sure that that mission, and perhaps the social environmental impact you want to have happens. So, it doesn't make sense if you're an impact business, to raise from a VC when a VC will end up making all of this money. And the money is then extracted from the business and from the mission as a decision you have to make. So that's one way to do it. And there's different instruments that you can use, that will give you different types of that will sort of give you more options. For example, if there's something called redeemable equity or redeemable shares, which means that actually you can raise equity, where you can buy that back from your investors. Again, investors get some money, but it's kept. It's this idea that investors should make an unbelievable amount of money is an issue and doesn't make sense for lots of businesses, when they need that money to keep going and to be sustainable. It's all around how much money should an investor get by that investment. And how expensive will that be for you. And the earlier you are, the harder it will be and the more expensive it will be because you're riskier. And as you keep going, more options open up to you. But the issue that we have currently in the ecosystem is that there's not enough options right at the beginning that sit outside traditional equity. Those options do exist, but they're not common. So perhaps it's more difficult for companies to get themselves off the ground. Yeah, so like there are funders that will use these different instruments or funders that will work with you to design something that makes sense on your terms together. But it's much harder to find them and not super common. And it takes longer so a lot of businesses will just grab money because they need it. It's not it's not their fault, they have to keep going. That means that you get further and further away, sometimes from actually where you want to be. So, we need funders to meet us where we are. And go, VC is one type of funding that actually look at all these other models look a bit older, the possibilities, here are some case studies, work with us to invest in different models, in different ownership structures. So that we have more examples of what's possible and becomes more and more common and easier to access that funding because founders shouldn't be at the moment in the interests of founders to educate funders on what they want. And that's not the way it should be, because who has time for that. And we need funders and founders to meet and start working together more to find and explore what different options exist.
Fiona
Right great explanation, and it was only six minutes.
Esme
Perfect.
Fiona
So if people are looking to enter this world, and what I find interesting is I had, I set up my own business 16, 15 years ago, 16 years ago, I never ever, ever needed any equity. I didn't need to borrow any money. But it was, and I didn't want to grow. I had small children. But I was a small consultancy, if you like. And there was nothing I needed to invest in or buy, or it was it was people and we were giving our services. And if our services were needed, we got paid. And then I would be able to pay the people. But now with where I’m personally at, we're doing tech development. And to do that development and to create something that's cutting edge, and get cut through, you need that backing. So for those people, I would say again, go on your course because you cover all the things you talked about. You also talk about debt, which I'd never considered before going on your course, lending. And I'll use the long-term bit just to cover a little bit more of the variety. We've got grants. And but it's not just grants. It's, well, what are the pros and cons of grants, because everything has a pro and everything has a con. How does that fit? How do you weigh that up? And I think that goes back to what I was saying earlier that going in with an awareness, you may make the same decision on where you get the money from. But if you have that awareness, it means that you're doing it with a different mindset, you're not going to get tripped up, you're not going to be surprised. You know what to expect. You know what the downsides are, rather than it taking you, knocking you off your feet and stopping you doing what you actually want to with your business. It's the it's a game though, because I mean, I said to my brother earlier, he was like, where are you at with fundraising, and I'm I don’t want to do fundraising, I just want to run the business. But it's a big job. And I think being part of a community that, again, you've set up, being part of being able to look around and have other people go, ‘Oh, my goodness, this is hard work.’ Or, ‘Oh, you never guess what this is what this VC suggested’, or, ‘Oh, I didn't get that grant or I have got that grant. And I need to have match funding, and I haven't got it.’ and all these sorts of conversations, that it just comes back to that common humanity of having other people going through the same thing is incredibly helpful and empowering. So, in the show notes, Esme I will put information about you and I will put the Considered Capital course in there. And then you run workshops and other courses, consulting, all sorts of things. So if you're in this world, then do look them up. And if you're not in this world, and you're listening out of interest, look because Esme posts some really interesting stuff. Thank you so, so much for talking to me today. Thank you for what you've done with being someone who has looked around the corners quite relentlessly, actually. Because you think you weren't getting the answers you wanted. So, you kept looking. And then when you found them, you wanted to share them with everyone else. So thank you very much for that. And it's a real pleasure to talk to you as always.
Esme
Oh, thank you and thank you for really giving me some food for thought there's lots of connections that you've made about the way that I've journeyed I suppose that I hadn't made myself so that's always really interesting to hear how someone else views your journey and relentless pursuit of something especially when it's just like well I
Fiona
So I will let you go back to your sunshine and I'm going to go and step outside and see if I get wet.
Esme
It may rain for me today, maybe I mean, for like five minutes of rain, and then everything will dry off.
Fiona
Thank you so much. Thank you. All right. You