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Home > Blog > Another One Bites the Dust
Out of Our Minds
Tuesday, March 21, 2006 1:34 PM
Another One Bites the Dust
Kevin Salwen on Making a Difference

Tom's of Maine today joined the list of companies that started with a social mission and now will try to continue that mission in the arms of a massive public company. Colgate is buying 84% of the stock in privately held Tom's for $100 million.

For those who follow the social missions of companies, it's been hard not to notice Tom's. Created by Tom Chappell, the firm grew nicely because of its values and unique flavors for its toothpastes and other hygiene products. Its products do not contain artificial sweeteners, preservatives, colors, flavors or animal ingredients, and are tested without the use of animals. Beyond that, Tom's donates 10% of its profit to charitable organizations and encourages its employees to use 5% of their paid time for volunteer work.

We can sit and lament the name brands that have 'sold out' for size sake: Ben & Jerry's, Odwalla, Stonyfield Farm, and others. But their founders have varying perspectives, as Worthwhile Senior Editor David Batstone reported in our March 2005 issue:
-- Gary Hirshberg, the co-founder of Stonyfield, which is now roughly 80% owned by yogurt giant Group Danone, sees his company's deal as a chance for a bigger platform: 'I view the Danone deal as an opportunity to take our mission to a larger arena.' Today, 10% of Stonyfield's profit continues to go to environmental causes.
-- Ben Cohen, co-founder of Ben & Jerry's, is far less satisfied after that company's purchase by Unilever. 'Although there are some wonderful people with a social conscience inside Unilever, most of what was the soul of Ben & Jerry's has been lost,' he told Dave. These days, he urges entrepreneurs to stay independent at almost any cost.
-- Greg Steltenpohl, a founder of Odwalla, had a completely different experience, finding himself forced to sell the natural-juice company by a board he mistakenly thought was in tune with his environmental values. Odwalla's acquisition by Coca-Cola has been disappointing to him: 'At first, I hoped that the spirit of Odwalla would make a positive impact on Coke. But the truth is, we just filled up one more rack on Coke's delivery trucks.'

Let's hope Tom's of Maine can be more than just another rack on Colgate's trucks. I wonder if there is a right formula for expansion with conscience.


23 comments

merrian - 4/22/2006 4:40:12 PM
"Suavante said the development is relatively simple, but because testing can be tedious the first sellable storage devices based on NanoMem technology are not expected to materialize until 2004." And it is 2006. So where is Nanomem? cna anyone find out anything about this?
merrian - 4/22/2006 4:37:03 PM
What happened to this idea from 2002?
mariel - 4/22/2006 4:27:10 PM
Michael Sauvante? Whoa! this is interesting. I checked out the bio. See he is a recent grad of one of those schools with pop-up ads, Charter Oaks. What successful entrepreneur needs to go back to college while establishing a new company in his 50s or whatever? Don't see Steve Jobs doing that. Bill Gates tempted to go back and get a degree from a Diploma Mill? Doubt it. What is the deal here?
shareholder - 4/21/2006 5:37:29 PM
Chuck - You will not get any specifics from Michael. He deals in ambiguity. He is very good at talking. He says a lot, without saying anything. It is a skill. I would not waste any of your time listening to what he has to say. Michael talks up the philosophy of Triple Bottom Line. A good idea. It appeals to a group of socially-minded investors. So, what has Rolltronics/SEER Group done for the community in the past 10-years. Name one thing. And, where does the "Sustainer Loan Program" fit into TBL? Who am I, you ask? I am one of his "faithful" shareholders. Someone who made the unfortunate mistake of giving Michael money. Cheers.
shareholder - 4/21/2006 5:28:19 PM
Michael, It is interesting to see you talking up all the "great" things you have done at Rolltronics over the years. How about you tell these people about the Sustainer Loan Program? And while you are at it, why don't you also tell these good people how much money you have taken, tax free, from the shareholders over the past decade. And, while you're at it, why don't you tell these good people how much income your companies have produced. Your biography says: He is recognized and respected as an expert in the start-up phase of business development; is quite knowledgeable and experienced in licensing, and occasionally even wears an “inventor’s hat.” Who are these "experts." And what inventions have you developed? To those of you reading Michael's comments. Do not be fooled. Be wary of "where" and "who" you put your money.
chuck - 4/2/2006 10:38:51 PM
Michael,

I am sure your colleagues have great things to say about you and of course I give you the benefit of the doubt in any area. How could I have any assumptions when you won't really say anything specific? I wonder why you spent so much space being defensive instead of just answering, though.

An honest question for an honest person. Please give us some of your credentials and background.

Why not one or two of your company names or perhaps just one of the ways your companies have been of concrete social benefit? One socially responsible project in all your 20+ years of experience would go a long way toward answering the question of whether the plan is genuine and might have merit beyond that exit for the founders and insiders you spoke of.
Michael Sauvante - 4/2/2006 10:05:05 PM
Chuck. I am sorry that I have done such a poor job in accurately conveying the benefits of this plan, causing you to use such terms as “new gimmick� and “hypocritical.� I am assuming that your presence on this blog means that you care about the topics covered in this blog and that your comments about me and my ideas are a reflection of that caring. However well intentioned your comments may be, that doesn’t mean that you are correct in your observations about me and the plan I have put forth.

Suffice it to say that investors and colleagues who have known me for years would tell you that you couldn’t be further from the truth in the assumptions you made about who I am, what my motivations are and whether this system is structured to be a win-win for all parties or not. Given your responses, I conclude that additional postings to further discuss these ideas with you will not improve the dialog and therefore I am not going to try. Good luck on your efforts Chuck to advance the causes espoused on this website. I wish you best regards.

For everyone else, I welcome anyone who would like to inquire further into these ideas and have a meaningful dialog with us. I have posted this information with the idea of freely sharing a business concept with others, in sufficient detail that they could even possibly implement it themselves. I have no problem with having my ideas challenged and having them stand in the full light of transparency. I like exchanges which include having observations made, questions posed and an ensuing discussion and invite others who share that approach. After all, the “About� page of this website says “We hope that this site can be a place where you'll come to discuss, to learn, to share your experiences, to find solutions in your worklife.� May we all do that.

Michael
chuck - 4/1/2006 9:24:27 PM
Michael, respectfully as well, you were the one who turned this thread into a plug for your companies and brought up money and the big buck. You went on for quite bit there about the insiders of your holding company having an 'exit' -- your word and one that does mean both making a buck and leaving -- but the investors only get 'a path to liquidity' -- a not so certain return on investment.

Respectfully, it sounds like what you are pitching is the standard corporate shenanigans whereby insiders construct very complicated companies no one, not analysts and not the investors, can keep track of and in which only the insiders do make a buck. Only now it's got a new gimmick -- alleged social responsibility.

Bringing up making money -- but no quarterly projections or accounatability for your company, very convenient! Bringing up exiting or liquidity for the 'founders' but then telling everyone else they should not be concerned about anything so crass is a tad hypocritical, isn't it?

So what are your many companies and what specifically have you done to walk your talk? What's your real street cred, dude?
Michael Sauvante - 4/1/2006 4:21:10 PM
Chuck, Thank you for your input. However, I respectfully disagree with what appears to be the thrust of your comments and feel that you a looking at these issues in a different way then we do. The issues you raise, some of which I consider valid and others I would not concur with, seem to focus on addressing problems which are not the ones we have addressed in crafting this solution.

Let me respond to some of the points you brought up. You began your case by stating that a “bottom up� holding company won’t provide the financial reward that a purchase by a major company would. You also point out that the “really big money is in an IPO� and a number of your other points are all about “making a lot of money� and pumping up the stock price. All that is possibly (but not necessarily absolutely) true on most counts, but in my estimation, misses the point about what motivates an entrepreneur like me and many others in the first place. If that is all we cared about, you wouldn’t see us making a posting on this blog, which is all about other things in life that we value equally and in many cases more than money alone.

In fact, with this community of entrepreneurs, it is often the question of how can they ensure that their company can maintain its integrity and values, after they move on, that is one of their greatest concerns, and not how much of a killing they can make. The very nature of these socially conscious entrepreneurs is that they often care very deeply about their employees, investors, customers, their communities and other stakeholders and want to find ways to take care of those others, as well as themselves. Our system allows them to address those other party’s needs in ways that they normally cannot do today.

I would point out that there is a large community of both large and small private companies out there where the owners have elected not to sell out their companies, just to make a big buck. You might go to www.smallgiantsbook.com and read about a book dedicated to that very idea that there are literally hundreds, if not thousands, of such companies in this country. You can also read an interview with the author that covers many of the points in the book at: http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2006/02/21/BUGFTHARMB1.DTL&type=printable.

Many of those individual companies that the author, Bo Burlingham writes about would be worth a good deal if they sold out to another company, but the owners have decide that selling isn’t their motive. Here is an example: “At Clif Bar, Gary Erickson faced a decision in 2000 of whether to sell the company to a large Midwestern firm for $120 million, of which he would get $60 million. He decided to walk away from that rather than give up what was most important to him, which was the quality of the product, the culture inside the company, and its relationship to the community and the world.� However, many of these owners might well entertain a realignment (sale, merger, etc.) of their company if they could be confident that doing so would not result in “selling out�.

Bo points out that quality, not growth, is often the hallmark of such companies and that many of them are wildly successful. I find it difficult to believe that if a number of those very popular and successful companies, whether big or small, combined together under a public holding company, that a healthy portion of the investment community would not find them very attractive. Making a fast buck is not the only motive for a good portion of the investment community as well.

On another point, you also made a statement that a “bottom up� holding company means that it has no money and therefore its stock can’t be worth much. I feel that there is no basis in fact to support that claim in such a blanket manner. That is purely a factor of the companies that are included in the mix, how successful they have already been in the marketplace, the respective market values of the individual companies and whether they need a pool of capital or not.

As I said above, there are quite a few very profitable private companies that could serve as the building blocks of such a public holding company. Many of them don’t need capital, but would like to provide for liquidity for their various stakeholders, including investors and employees. Therefore, for them, just listing their stock and not issuing an IPO is quite satisfactory and helps to accomplish that goal. For others, raising capital is one of their objectives and the cost of capital in the public marketplace is certainly substantially less on the average than private capital is, and is often a great deal easier to raise. Those are some of the issues that come into play when evaluating the particular strategy for a particular group of companies and we help companies and their owners to explore all of their individual objectives and help craft a solution that fits them. In essence, there is no one size fits all here.

On another point, you compared the role of the holding company organizers and management team to VCs and questioned the value of their contribution. VCs usually just contribute money (and little expertise) to a private company and therefore do little to increase its value. I would point out that the value contributed by the initial organizers of the holding company, in putting together the whole enterprise (all the separate mergers and the process for getting the company public) and the ongoing role of management, is very complex and entails a great deal more than suggested by you, and that combined effort more than compensates for their portion of the company. Very few entrepreneurs running their own individual private companies have even the slightest clue how to go about doing a merger, how to get the company public, raise money in the public marketplace and then run a public company.

In addition to that specialized knowledge, I would point out that market caps for public companies average approximately 5 times the value of their private counterparts. The average P/E for private companies is usually around 5 to 6 times whereas it is more like 30 times for public companies. Obviously that varies company by company and industry by industry, but across the entire market, those are reasonably representative values. Nonetheless, that means that even accounting for the piece of the company that is allocated for the team setting up and running the overall enterprise, the net overall gain for all the participant companies should yield an increase (and probably substantial increase) in their pro-rata market value.

There are a number of the other points you made for which we have answers (such things as liquidity for the entrepreneurs; why companies would band together as such; and your final assumption that patience on the part of the entrepreneur can “win the day�, which runs counter to the article we are all posting to – ask Ben Cohen if Unilever has worked out to his satisfaction), but this posting is already long enough.

I can summarize it by saying that this system was created by myself and several other entrepreneurs who have struggled with a number of these issues for many years and through a number of companies. Collectively we have launched and run multiple private and public companies. I myself have been an entrepreneur since 1977, have raised millions of dollars, mostly from non-institutional sources – which means the hard way, and have had to deal with all of the problems that face the kinds of entrepreneurs that are talked about in the above named book.

We developed this system to solve problems we and others like us were facing today. The idea for sharing this with other entrepreneurs came about as a result of having explained our system to a former CIO (chief investment officer) of CalPERS (the world’s largest pension fund and backer to many VCs and other private equity funds) who, after hearing the details and applying the concepts to investments they had made in many companies, stated that it would solve a number of problems they likewise have struggled with for years and said “That’s a very good idea!�

As I said above, I have already discussed this idea with a number of such entrepreneurs and have gotten a very positive response. It is to the entrepreneurs of this world and those that would support them financially and otherwise that I have put forth these ideas and I would say that their endorsement is more than enough encouragement for us to continue to develop this system. I would encourage those who would like to know more, including even addressing the points raised by Chuck, that you feel free to contact me at sauvante@seergrp.com or tel. 805-682-3335.
Chuck - 3/30/2006 7:42:56 AM
Even a public holding company, unless it was Berkshire Hathaway, is not going to provide the founder with the kind of financial reward that a sale to a major corporation would. A 'bottom up' holding company like the long post above just means it has no money, so its stock can't be worth much. And the really big money is in an IPO. Are these smaller companies banding together for an IPO, and without analysts and journalists touting it, how do you demand a high price for the stock? Unless you bypass the analysts (many of them are full of BS anyway) and go directly to a brokerage house or two to sell your shares and make a market for you. (I used to work at a broker dealer and then a fund until I got sick of it.)

Is the holding company getting all its sucessful subsidiaries to sign on because then you're gonna all do an IPO together? That might make sense if at least some of the companies were profitable and/or had a scalable product or services. But in an IPO, the founders and such can't sell. They have to wait. Without analysts on your side, how do you keep the price of the stock up long enough for the sub entrepreneurs to take their 'exit.' I hope you have a couple of brokers to champion you.

Most socially responsible businesses are small though and local, not scalable or attractive in an IPO. But that's their beauty as socially responsible and meaningful companies. Anyone interested should read a good book on not selling out called The Company We Keep: Reinventing Small Business for People, Community, and Place by John Abrams.

Why would successful companies join a holding company? If the holding company is doing all that reporting and adminstration and investor relations, then they are not making money on their own. They must take a cut of the subs just like a Venture Capitalist would. How is it better for the entrepreneur and his shareholders if there are any?

Why would an enterpreneur with a successful company do anything other than hang in there like Ben, Jerry, Gary or Tom until they could be acquired and just make the right deal to protect their company so that it always adheres to the right values. Or just hang in there and not seel out. In the case of Tom Chapelle, I think he's getting on in years so maybe this is his retirement.

Stonyfield has done a fantastic job in maintaining all their integrity and clout so it can be done. There are a number of ways to make an entrepreneur's long awaited profit and see the fruit of his labors, be able to form a large foundation maybe and still keep the company pure. Simple greed would help the big bad corporation toe the CSR line. Cause if they don't the brand looses street cred and then its market share. For the big, bad take-over corporation not to keep walking the talk of its predecessor is suicide.
Michael Sauvante - 3/29/2006 10:56:23 PM
Suzanne, I didn't have an email address for you so I have to post my reply here. My email address of sauvante@seergrp.com is working fine and others have sent me messages. If that doesn't work, try sauvante@seertechcorp.com or sauvante@earthlink.net -
Yes, consulting is an option we can explore. Thanks for the thoughts.
suzanne - 3/29/2006 7:52:19 PM
Whew! That's a pageful, Michael. Very heartfelt and you guys have obviously put a good deal of thought into this. Kudos to you. I am not sure I understand it all and your thoughts raise a few questions for me. I emailed you at the address above but it bounced back as an adderss with permanent fatal errors. Eeks! We are in Southeast Asia right now and calling is difficult (it's morning here when its evening in the States) but would welcome more info both about your companies and whether you consult to others or to groups. Can you let me know when your email address is working? Thanks and keep up the good work. I googled you and you seem like the man, Michael! Look forward to hearing from you.
Michael Sauvante - 3/29/2006 3:06:11 PM
In post #9, Suzanne asked the question “how does a holding company protect intentions?� The following is a long post in response, but given the feedback I have already received, I felt it would be helpful to share this information more broadly.

To begin with, there is nothing inherent in a holding company per say that protects the intentions, but rather how is it created, how it is structured and how it is run that helps to create the protection. A holding company by definition is a company that holds other assets, be they other companies, real estate, etc.

In this case we are talking about a company whose principal assets are other companies, in the form of wholly or partially owned subsidiaries. In our plan, those subsidiaries would initially be composed of pre-existing companies that have banded together under a new holding company (call it NewCo for convenience), set up for the purpose of giving them a collective identity.

The first layer of protection that a holding company provides results from the fact that only the management in the holding company, and not the individual subsidiaries, needs be directly concerned with all the issues associated with being a public company – i.e. regulatory reporting, dealing with the investor community and analysts, raise additional capital to grow the company, etc. Thus the individual companies and their respective management are freed up from that extra burden. Many entrepreneurs that have taken their companies public have discovered that it is an additional full time job to just do the things required to run a “public company�, let alone to run their respective businesses by providing their respective products or services.

With respect to the issues related to being public versus private, we find that one of the inherent pressures of being a public company is the swaying of public opinion caused by the analyst community, pitting the performance of one company against others, in the same industry. Here is where we find another layer of protection inherent in the nature of a holding company in that it is difficult for the analysts community to analyze and evaluate a holding company. That is especially the case if the subsidiaries represent a diverse set of companies from industry standpoint. Analysts tend to be industry centric and a company composed of subsidiaries representing multiple industries makes it difficult to analyze and compare them with other similar companies.

A NewCo holding company composed of a diverse set of subsidiaries, whose common thread is their values and not their products or services, would create such a difficult target for analysts. NewCo and its management can further distance themselves from the influence of the analyst community by refusing to play the game of issuing quarterly profit projections, declaring instead to the public that the collective company is all about sustainability and creating long term shareholder (and other stakeholders') value, not just short term value. They need to have the courage to define the kind of investors the company wants and doesn't want, and this system allows them to do so. The SRI community is hungry for good public companies willing to stand up for long term sustainability principles and not buckle under to just short term profit influences.

Now let’s look at it from the governance standpoint and how that can further protect the interests of the parties. Most holding companies grow and evolve by acquiring other companies. Berkshire Hathaway (www.bershirehathaway.com),Warren Buffet’s company, is a good example. This is a top down approach where a company achieves its growth by first commencing with a sufficient asset base as to give them “buying power� to go and acquire other companies.

In our case, NewCo is built from the ground floor up, where the individual companies serve as the asset base to establish their own holding company. In so doing, they, the individual companies and their management, are not being “bought out� by someone else that will determine the company’s future thereafter, but rather they “build up� by teaming with others who share their philosophy and values, and who collectively constitute the governing vision for the holding company. By starting with this kind of base, there is a much greater chance that the collective enterprise can maintain those values and practices and withstand the countervailing pressures of the public marketplace.

All of this can be also be directly reflected in the corporate governance instruments (bylaws, articles, etc.) and the control of the board of directors and the selection of the management for the holding company. In our case, we have created such a holding company and established two classes of common stock, Class A common and Class B common, in which the stock held by the general public, Class A common, has the rights to elect 1/3 of the board of directors and the Class B stockholders (a small group unwaveringly committed to what we call the SEER Principles – Social, Environmental and Economic Responsibility) elects 2/3 of the board.

We are also going to establish various board committees, similar to an audit committee, whose collective purpose is to make sure the holding company and all its subsidiaries incorporate these principles in their makeup and activities. This would include committees that address such things as human capital, environmental and social impact issues. As the board is selected by the shareholders, this structure is consistent with normal corporate laws, which require that the board has a fiduciary responsibility to the shareholders and to do their bidding as their 'prime directive'. Thus, by the implementation of those committees, our board will reflect our objectives and fulfill their fiduciary responsibilities to us in a way that is consistent with our values.

We are also carefully selecting the management of the holding company to insure they hold true to our values and can adequately present that persona to the public. Thus we can be sure that the holding company, all of its subsidiaries and all of its employees “walk the talk� on our values and that pure “economically only centric� viewpoints cannot unduly influence the collective company and mission.

One final point about this overall structure. Not only does this allow for individual companies and their owners to band together and maintain their values and principles, but it also provides a number of other very practical benefits to a variety of participants.

Here is a list of some of those benefits:

1) for the owner/founders, translating their ownership interests into publicly traded shares provides them with an “exit strategy� wherein they can “sell�, but not “sell out� and be confident that their vision and values won’t have to be compromised in the process, and

2) for employees, through various means we have devised, the process by which the individual company can be integrated into the holding company can include a pathway to provide for greater ownership interest on the part of employees where previously only partial or no ownership whatsoever might have existed prior to joining in this effort, and meaningful ways for existing and future employees to likewise get a piece of the company are also very doable, and

3) for all the other shareholders, they likewise would have a path to liquidity that is usually only afforded to them if the individual company goes public or is bought out, and

4) the cost of capital for the collective enterprise (useful for expansion, new project creation, acquisitions, etc.) is substantially lower for a public company than it is for private companies and significantly easier to raise, and

5) given that the holding company is initially composed of a number of successful companies, having been founded and built by entrepreneurs who have overcome the odds and succeeded in creating sustainable enterprises individually, we find that this group of successful entrepreneurs can serve as a highly qualified group of mentors for creating and growing new enterprises under the umbrella of the holding company, thus giving it a growth path if they choose to pursue one, and with a public pool of lower cost funding available to them, that may well far exceed the success rate of new venture creation fostered by other enterprises like Venture Capital companies, and

6) for the general public investment community and the institutional investment community, investing in a company that has been established by aggregating pre-existing successful companies greatly reduces the risks associated by investing in a single company that has gone public on its own, not to mention that if these companies are all operated and run as socially and environmentally responsible firms, thereby affording the SRI and CSR communities greater opportunities to participate in more such companies that share those values.

In closing, one of our corporate objectives is to help other companies interested in implementing such a plan, by help them to create additional new holding companies and integrating those existing companies into them. As stated in posting #5, if anybody is interested in learning more about this plan, feel free to contact me at sauvante@seergrp.com. I can also be reached at (805) 682-3335.
David Berg - 3/29/2006 12:35:39 PM
I have mixed feelings about corporate buy outs. In the case of Ben & Jerry's it didn't work out well. For the others listed above it does not look like it has hurt anything. Their agreements in their acquisitions have protected their companies well. I have faith in Tom Chapelle that Tom's of Maine can continue to be run in an ethically enlightened, socially conscious manner.
Suzanne - 3/27/2006 9:54:31 AM
So far Stonyfield has not seemed to suffer any in its mission, philosophies or integrity since being bought by Danon (pronounced kind of like Dan-none, the French Food conglomerate that produces Danon yogurt and Danon water. I do hope that Tom Chapelle has structured his deal right. Anyone know anything about his organization to help other companies stay on track for a healthier planet and society, the Saltwater Institute (www.saltwater.org)? Am also interested in Michael's idea (post #5), how does a holding company protect intentions?
gulliver - 3/23/2006 1:43:58 PM
>What if the founder sells, then uses the cash for social ventures or philanthropy? Does that make things more palatable?

I don't think 'palatable' comes into it... the ventures are theirs to do with as they wish - it's nought to do with anybody else and as 'outsiders' our part is minimal... simply to chose whether to consume and perhaps chat about it.
Kevin - 3/22/2006 4:19:42 PM
Jenny,
I am sorry I accidentally (but permanently) killed your comment in an effort to fix the slow comment process. Can you re-post? Apologies, Kevin
Merrian - 3/22/2006 3:33:51 PM
Seems that there are a number of people and groups working on ways for companies to get capital, or allow owners to retire, while still keeping ownership local, such as through employee ownership, selling shares locally, and a nunber of holding company schemes. I work for the Business Alliance for Local Local Living Economies (BALLE) and this will be a big topic of discussion at our June 8-10 conference in Burlington, VT - www.livingeconomies.org. One of the speakers is Gary Erickson, owner of Clif Bar, who almost sold his company and then back out of a deal at the last minute. His book tells a great personal story about what entrepreneurs struggle with around this issue.
Michael Sauvante - 3/22/2006 2:44:30 PM
This is in response to Jenny who made an earlier posting that is no longer there. The broader issues of this article have led me and a number of my entrepreneur colleagues to come up with a possible solution to this dilemma. We have developed a plan for aggregating a number of companies, who share these common philosophies, under a new 'holding company' that is taken public on its own. Each of the former individual companies maintains their identity as a wholly owned subsidiary under the holding company. This way we can quickly achieve the “BigCo� concept that Jenny was talking about by this pooling effect. Yet the individual companies can maintain their integrity and values because the whole company is composed of like minded business people and they collectively govern the board of directors of the holding company. We have already formed one such company and it is just going public now. If anyone is interested in learning more about this idea, please feel free to contact me at sauvante@seergrp.com. SEER stands for Social, Environmental and Economic Responsibility.
Kevin - 3/22/2006 8:47:01 AM
OK, let me throw another wrinkle into this one: What if the founder sells, then uses the cash for social ventures or philanthropy? Does that make things more palatable?
martin - 3/22/2006 8:21:59 AM
But why have these folks sold in the first place? It wasn't as though they were getting pressure from their shareholders to sell. They sold for money. Pure and simple profit gain. I support (both in spirit and in purchasing) socially responsible products. However I have a tough time feeling sorry for owners who sell their company and lament that Mega-Corp didn't adopt their values. Leopards do not change their spots. (Oh, and I don't think we'll see Crest adopting Tom's anise flavored toothpaste. Stock up now.)
Sonia Cafe - 3/22/2006 6:29:00 AM
We just hope that consumer consciouness will be the final ingredient for the right formula. As long as money is the most important 'value' in the conversations, all else will be in danger of waiting forever, or until the environement will allow consumers to exist.
gulliver - 3/22/2006 5:46:11 AM
>I wonder if there is a right formula for expansion with conscience.

Not if it involves a 'normal' corporation.

Interestingly - or not - in almost all examples of which I'm aware, the seller knew in advance what the likely result would be... and chose to sell anyway.

Perhaps that's how we should now be building businesses... leap on the 'do good' bandwagon to launch and grow them - then sell for profit when they're running nicely.

As a positive - though unrelated - example, I recall Branson buying back one of his sell-offs when he bacame unhappy with the enforced direction-shift caused by normal commercial pressures.

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