Investing smartly
In response to their personal needs, the founders of SportComponents Ltd invented a bicycle valve for hose-less tyres (milKit.bike). They were delighted that many others wanted to have this valve as well. Demand was great.
They planned the production of the valve system. However, like many other start-ups, after a short time the inventors were faced with the problem of having too little capital to finish, manufacture and distribute it.
Often good ideas cannot be realized due to lack of money.
The search for donors is often difficult in Switzerland, as it was for this valve system. Despite low interest rates, many are hesitant to accept a risk when investing.
There is an innovative and extremely dynamic start-up scene in Switzerland, which urgently needs start-up capital to implement its ideas and the projects developed from them.
Pension funds could be seen as potential sponsors for start-ups, as they have sufficient capital. But because of the risk, they only very rarely invest in young companies.
CoOpera Partners Ltd, which is part of the PUK pension fund foundation, is an exception. It invests in young companies and so jumped at the chance of supporting Sport Components Ltd.
The control of foreign companies by profit-oriented investors is self-evident in today's economy. This means that decisions are often made on the basis of short-term profit-taking instead of long-term business success.
Here, too, CoOpera takes a different path and focuses on the goals of the growing company. The right of control is therefore deliberately given to the entrepreneurs, while CoOpera stands ready to advise them. If profits are achieved, CoOpera only takes a part for itself; the rest flows back to the company for the financing of further development.
In today's companies, such approaches are hard to find; it often seems to be the aim of investors to receive as much profit as possible. It should be our goal that more and more sensible forms of investment are discussed and that newly conceived models (such as those found at www.purpose.ag) are not only considered but also implemented.
Pius Kobler
My Name is Bond, Youth Bond
We should invest in the ideas and projects of young people, enabling their dreams and furthering their capacities. With Youth Bonds!
The English poet, Wordsworth, once wrote of new-born children that they come “trailing clouds of glory” (From: Intimations of Immortality from Recollections of Early Childhood, William Wordsworth, 1807). He meant that, whether we understand it or not, human beings are not born of molecular collision. They come from somewhere, bringing with them talents, innate skills and interests. Above all, the potential of the biographies that then unfold. Indeed, it is these that then become the next step of history.
Writers such as Wordsworth, whose very name means poet of high standing, belonged to a time when the deeper aspects of history were becoming occluded by the dark shadows cast by the Industrial Revolution, in whose mechanistic terms all life has ever since been conceived. The aridity of industrial society – with its close companion, mere finance – has resulted in humanity seeking meaning in science or in past history, when we should seek it in the freely unfolding lives of young people.
It is these lives we should invest in. These dreams we should capitalise. These hidden capacities we should irrigate from the colossal pools of liquidity in which modern existence is otherwise drowning.
Intent on preserving rather than circulating capital, we make everything the subject of a financial market, indebting rather than enabling young people. Especially when we lend them money to study, ignorant of the non-recognition and begrudging of youth that this demonstrates – and blind to the fact that life-time earnings statistics disprove the calculations whereby student loans are justified.
With such a huge vote of no confidence Wordsworth’s “shades of the prison house” begin to close. But how different it would be if young people everywhere were advanced the liquidity they needed as and when they needed it? To be returned as and when the circumstances of their borrowing allowed, rather than on terms set by the lending.
For this we – that is, they – need but issue youth bonds to the public (see www.youthbonds.com), to be bought at risk by people with money they can afford to lose or, better put, allow to flow on from them. Transforming it from stockage in ever-more unreliable real estate and financial markets, into flows that underwrite the development and application of new talents, new biographies – and so also new values.
Youth bonds are the missing instrument in today’s financial world. Their absence – that is to say, the refusal to allow capital to ‘die’ – is the reason for the excess scale and inherent instability of modern finance.
Where to start? They already exist wherever young people find themselves advanced credit so that they can make good their aims in life. Mostly this is familial or through friends. It occurs informally. But it is also the economic meaning of tax-funding education, whereby a community transfers some of its income to its youth as grants. No contract is expected in such cases, because it is normal and natural to trust to life and that young people will put their education to good account – not in terms of what income they can generate from their education, but what service they can provide to society. Doctors, teachers, trades-people – there need be no thought of lending on condition of a future income stream. Capital needs to flow; then gifts and giving will also flow. No one derives an income through self-serving, only by serving the community.
What is needed is to add to the myriad informal instances of trusting to young people, the formal arrangement of youth bonds.
Christopher Houghton Budd
