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Questions and Answers

What is a key critique of the '2 and 20' fee structure used by Impact VCs?

It disproportionately benefits the limited partners over the general partners.

It does not align with the long term goals of social enterprises

It can lead to a focus on maximizing returns rather than social impact because of the 'carried interest' component. (correct)

It limits the amount of capital available for investment in underserved communities.

According to the document provided, which of the following best represents a potential problem with the celebration of company 'exits'?

They may only serve to benefit the acquirer rather than the company's social impact goals.

They lead to a decrease of innovation within the company once a larger corpoartion takes over

They contradict the notion of building businesses for the long-term rather than short term gain. (correct)

They often displace the original founders and leadership, reducing the mission impact

What is the primary deliverable for Part 1 of the individual assignment, as outlined in the document?

A review of current philanthropic and corporate social responsibility initiatives.

A report on how to improve the university’s entrepreneurship curriculum.

A sustainable business model canvas, an MVP experiment, and a PGE Playbook for a fictional company. (correct)

A presentation on impact investment strategies.

What aspect of the standard VC fee structure is 'Snowball IM' suggested to remedy?

The carried interest which is typically 20% of profits above a certain hurdle rate. (B) Signup and view all the answers

According to the document, what does a CEO of a B corporation need in order to retire while still maximizing the social impact of the company?

To create a 'succession plan' and appoint a like-minded successor. (D) Signup and view all the answers

Which of the following is NOT a key concept associated with the Degrowht Movement?

Sustainable development (A) Signup and view all the answers

What does the ‘doughnut’ in Doughnut Economics represent?

Two concentric rings representing environmental limits and social needs (B) Signup and view all the answers

Which of the following is NOT a characteristic of the ‘Business as Usual’ scenario predicted by the ‘Limits to Growth’ report?

Sustainable development (A) Signup and view all the answers

What does the phrase ‘bespoke solutions’ likely imply in the context of “men and the elephant’?

Tailored solutions for specific contexts (D) Signup and view all the answers

Which of the following is a key difference between the ‘Limits to Growth’ report and the Degrowth Movement?

Acceptance of economic growth as the ultimate goal (D) Signup and view all the answers

What is the significance of the 1972 date mentioned in the content?

It is the year the ‘Limits to Growth’ report was published (C) Signup and view all the answers

Which of the following thinkers is NOT associated with the Degrowth Movement?

Kate Raworth (A) Signup and view all the answers

What is the primary message conveyed by the phrase “men and the elephant”?

The diversity of perspectives in tackling challenges (A) Signup and view all the answers

What is the likely purpose of the URL provided in the content related to Post Growth Economics?

To offer resources and information on post-growth economics (B) Signup and view all the answers

Which of the following is a possible reason why the ‘Limits to Growth’ report was considered ‘controversial’?

It challenged prevailing economic models (B) Signup and view all the answers

What is a primary focus of Post Growth Entrepreneurship (PGE)?

Creating non-extractive businesses (D) Signup and view all the answers

Which of the following statements about sustainable development goals (SDGs) is true?

They consist of 17 interconnected objectives. (B) Signup and view all the answers

What is a primary critique of philanthropy?

It often results in hoarding wealth and does not effectively redistribute money. (D) Signup and view all the answers

What does the 'ecological ceiling' refer to?

The limits within which humanity must operate to avoid environmental overshoot (B) Signup and view all the answers

What key concept should all organizations optimize for according to the presented ideas?

Social impact without financial extraction (C) Signup and view all the answers

What is the relationship between Corporate Social Responsibility (CSR) and philanthropy, according to the text?

CSR is described as a type of 'philanthropy for companies'. (C) Signup and view all the answers

Which of the following contrasts with the idea of 'flat growth' in the context of Post Growth Economy?

Exponential growth within business practices (C) Signup and view all the answers

What is a major issue with the social enterprise ecosystem?

It is lacking a unified and coherent structure. (A) Signup and view all the answers

What function can financial extraction serve in assessing the 'mission orientation' of a company?

It helps to determine how 'mission oriented' a company is, regardless of labels. (B) Signup and view all the answers

What is a potential outcome of eliminating all financial extraction from a business?

It might make every company into a mission-oriented organization. (D) Signup and view all the answers

What is implied about the ability of any company to call itself a social enterprise?

Any company that fulfills a genuine social need could potentially call itself a social enterprise. (A) Signup and view all the answers

What effect does philanthropy have when it takes the form of tax relief?

It is considered a form of reputation laundering (D) Signup and view all the answers

Study Notes

Post-Growth Entrepreneurship

This field focuses on creating and managing businesses that are not focused on maximizing profits, but instead on sustainability & social well-being.
A key aspect is avoiding extraction and maximizing ethical practices.

Individual Assignments

Part 1 (due Feb 5th): Students must design a fictional non-extractive company including:
- A Sustainable Business Model Canvas
- An MVP Experiment Canvas for the Minimum Viable Product
- A 500-word bootstrapping plan (1 A4).
Part 2 (due Feb 5th): Students must submit a 1500-word report (not including references) detailing how they would redesign the University of Amsterdam's entrepreneurship curriculum (3 A4 pages total).

Impact Investment

Impact Venture Capital funds social enterprises.
This can include funding organizations aimed at underserved communities.
Current problems with Impact VCs mirror those of commercial VCs: similar fee structures ("2 and 20" structure).
"Carried interest" fee structure embeds a focus on growth into social enterprises. This could be problematic.
Fee structures can be reformed (e.g. using Snowball IM).

Impact Exits

Selling a B corporation to a large corporation (e.g. Unilever) is a form of exit.
Celebrating exits is ironic when it relates to the claims made of businesses aiming for long-term societal good.
Selling can sometimes result in greater social impact given the larger reach available through the acquiring corporation.

Philanthropy and CSR

Philanthropy is used to justify hoarding wealth.
It does not guarantee fair or efficient redistribution of money.
This type of philanthropy is often seen as a form of reputation laundering or a means of tax relief.
Charitable giving often serves as political donations.

Eliminating Extraction

Every company, regardless of how it labels itself (social enterprise or not), should be evaluated based on its level of financial extraction.
Financial extraction can be used to determine the priority of a company’s mission as well as the nature of its impact.
Eliminating extraction could make every company more focused on its social mission.

Creating Bespoke Solutions

The social enterprise ecosystem lacks unity and coherence, somewhat like the parable of blind men and an elephant.
Approaches to social enterprises require evaluation based on strengths and weaknesses and avoid internal tribal clashes.
Collaborative efforts are encouraged for developing bespoke solutions.

Post-Growth Entrepreneurship (Part III)

The Limits to Growth

In 1972, the Club of Rome and MIT published "The Limits to Growth".
This report used World3 computer simulations to show how exponential economic and population growth with limited resources would lead to constraints by 2072.
This showed there are limits to growth given the current conditions.

Post-Growth Economics

Post growth Economics is a subject dedicated to studying alternatives to the growth-focused economy.

Degrowth Movement

Thought leaders in the degrowth movement include 19th-century anti-industrialists, as well as Nicholas Georgescu-Roegen, André Gorz, Serge Latouche, E.F. Schumacher and Jason Hickel.

Doughnut Economics

Kate Raworth developed Doughnut Economics, proposing a model for sustainable economic development.
The model consists of two concentric circles (a "doughnut"): social foundation (no one falls short on basic needs) and ecological ceiling (mankind does not exceed ecological boundaries).
The goal is to remain within this "doughnut" of sustainable norms.

New Economics

Thought leaders in new economics include those already mentioned and Douglas Rushkoff, Charles Eisenstein, Christian Felber, Mariana Mazzucato, David Graeber and others.

Definition of PGE

Post-Growth Entrepreneurship (PGE).
Definition: The practice of creating and operating non-extractive businesses.

Main Elements of PGE

Three main elements are:
- Supporting Entrepreneurs through Bootstrapping techniques.
- Flat Growth (as opposed to exponential growth)
- Non-Extraction of resources

Beyond the SDGs

Sustainable Development Goals (SDGs) serve as blueprints for a sustainable future for organizations.
Many companies focus on achieving the SDGs.
Broader consideration is needed for businesses outside this niche focus.
Everyday, mundane businesses that are not necessarily aligned with SDGs are another area of focus.
All organizations need to evaluate options for social impact.

Ethics By Design

Companies should build ethical practices into their design from the start.
Unethical practices are difficult to correct, much like band-aids on systemic issues.
In today's economy, maintaining ethical standards from the beginning (by design) is critical.

Compensation Caps

Financial extraction can be reduced by putting caps on compensation.
It is important to consider financial fairness and an ideal compensation structure for optimal happiness rather than just achieving profit maximization.
"Fair Compensation" in the context of CEOs can be complex to define.
The optimal compensation structure may vary based on industry and location.

Who is PGE for?

PGE applies to several types of entities: startup founders, established corporations, governments, NGOs, incubators, and the creative sector.

Bootstrapping

Bootstrapping in entrepreneurship is a vital part of sustainable enterprise practices.

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Description

This quiz covers the principles of post-growth entrepreneurship, focusing on sustainability and ethical practices in business. Students will design a non-extractive company and propose a redesign of the University of Amsterdam's entrepreneurship curriculum. Discover how impact investing plays a role in supporting social enterprises and underserved communities.