21 lines
2.0 KiB
Markdown
21 lines
2.0 KiB
Markdown
---
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title: Workers Capital Rider
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description: A rider for investment terms that helps ensure a worker-friendly outcome, developed by Eduardo Cabral of Triple Beam Advisors.
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tags:
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- cooperative
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- investment
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external_url: https://www.triplebeamadvisors.com/
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files_media: ../../Exit%20to%20Community%20Stories%20&%20Strategies%202ee6f9c491af45648511f5df33c5cfc5/s71818-4403356-175575.pdf
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---
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1. Reserve **X%** of the total financing round (or **$Xk**) for investors committed to:
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1. A **capped return model**, targeting no more than **X% IRR or a fixed MOIC**, with excess gains recycled into employee equity pools or retained for other company purposes; and/or
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2. **Aligned exit incentives** whereby upon a Corporate Transaction (or other to-be-agreed milestones), investors recoup any gain on their invested capital _only_ if employee ownership pools or other forms of incentive equity (excluding those granted to the founders) also receive at least 50% of the full liquidity they are entitled to under the waterfall provisions (or otherwise distributions will be prorated as needed to ensure an equitable distribution to the employees).
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2. **Prioritize Shared-Risk & Embedded Shared-Outcome Structures**: Collaborate with Investors who embrace frameworks inspired by solidarity economics and cooperative finance, such as:
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1. **Profit-sharing**: Returns tied to enterprise success, not fixed interest;
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2. **Worker-Investor Covenants**: Mechanisms (e.g., side agreements, SAFE-like instruments) to ensure capital providers share both upside and downside risk with labor stakeholders.
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3. **Worker Friendly Governance**: Optionality for economic rebalancing (e.g., redistributive equity pools triggered at exit).
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4. **Vesting-Adjusted Dividends**: Investor dividends accrue but only vest upon equivalent employee profit-sharing milestones.
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3. **Transparency & Accountability**:
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1. Report annually on progress toward sourcing solidarity-aligned capital, including challenges faced.
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