can companies issue stakes in their success without using shares or options? this startup thinks so

So-called ‘stakeholder capitalism’ has not had the most illustrious of histories. Yes, there have been ‘Walmart Associates’ who were able to own stock in the company, or ‘John Lewis Associates’ (in the UK), but it’s hardly made the average person well off. At least they got something? In tech startups, however, tech founders are helped by many people along the way, most of whom will never work for the company but who can have an enormous affect at the early stage. That one intro to an investor, for instance, can be a game-changer. But tech founders have what is known as “founders amnesia” which means that when eventually they get that $20 billion exit, they somehow forget all the people that helped them along the way.

Koos (which, in Estonian, means ‘together’ and ‘alongside’) offers a standardized API allowing companies to offer a form of ‘stake’ in a company’s success, and – breaking news – it doesn’t use blockchain tokens to do it.

Unlike a loyalty program, the Koos ‘equity-like’ platform pays out to stakeholders only when the company meets predefined business goals. Koos claims this means the platform is much more ROI-positive and rewards those who contributed to the company’s success, unlike, say, a simple loyalty scheme for customers.

How it works: a company defines a business goal; sets out when the business goal is met; records meaningful actions via its tokens (not blockchain ones); and pays out via the Koos platform on results.

Founded earlier this year by serial entrepreneur and the former CIO of the Estonian Civil Service, Taavi Kotka, Koos says it can be used by companies to issue ‘stakes’ (but not options or shares) in companies more easily than issuing said options or shares, it claims.

It’s now raised $4 million in seed funding led by relatively new European VC Plural, with participation from investors including LocalGlobe, Tiny.vc and Matt Clifford, co-founder of Entrepreneur First.

This follows an angel pre-seed round of $600,000 from a number of Estonian founders such as Taavet Hinrikus, former CEO of Wise, Sten Tamkivi, co-founder of Teleport, Markus Villig, founder of Bolt, and Kaarel Kotkas, founder and CEO of Verrif.

It will now build out its platform across the UK and Europe, with a legal framework that complies with EU and UK law.

Kotka, who led the Estonian government’s policies around digital democracy and e-government for four years, said in a statement: “We have come up with a digital tool that allows businesses to engage and reward their community, widening the circle of people who have access to equity-like incentives which in turn increases the pool of people who will advocate for the business and want it to succeed.”

The startup says it now has 27 companies running its platform, including start-ups, NGOs, SMEs and larger corporations. Koos makes its money via an onboarding fee, a monthly retainer, and 1% of all rewards (tokens) created by the programmes on the Koos platform. 

For any service consumed on Forus’ platform, 1% will be given as a Koos token to the client, 1% to the service provider and 1% to contributors.

Sten Tamkivi, adviser and Plural Platform co-founder, said in statement: “Plural wants to invest to help create a more equal society. We believe that broader community ownership leads to more meritocratic systems so that wealth can be distributed based on actual contributions. Koos has come up with a way to track the support of all stakeholders in a community or business, without having to give away equity. We anticipate that the platform Koos is building will become an essential building block of many startups, funds and communities including charities and NGOs.”

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