CC shares - how and why we donated 51% of Counter Culture to social initiatives

Very early in the formation of Counter Culture, we knew we wanted a strong social component to the business, not just because it was the right thing to do, but because it would motivate us more to work each day towards something bigger than simply making more money for ourselves. Like the majority of startups, we were unapologetic in wanting to thrive as a business and take it as far as we could, but that wasn’t enough. Harry had a life ambition to raise £1m for charity; Tom thought that sounded like a cool challenge.

It’s clear that in today’s world, a business without some form of social agenda is at risk of alienating themselves from their consumers, employees and all other stakeholders. We saw many businesses around us with B-Corp and carbon neutral certifications and, whilst we strongly welcome this level of organisational accountability, we quickly realised that for us this should serve only as the floor and not the ceiling. Inspired from conversations with our director Andy Chapman around Effective Altruism came the idea to divide Counter Culture’s ownership in (almost) equal halves, as explained below.

What are our CC shares?

Counter Culture has two types of shares: Ordinary and CC. Many will be familiar with ordinary shares, the most simple form of share that would typically be owned by founders, employees and investors giving the holders a say in how the business is run and a share in its profits.

CC (standing for compassionate capitalism) is our creation to sit alongside our ordinary shares. The key characteristic of our CC shares is that they are only to be held by social initiatives. These initiatives are principally charities, but we have also considered other entities such as charity-locked community interest companies. While strictly not charities themselves, 100% of any profits they do make do go to charity.

The key characteristic of our CC shares is that the holders of them receive 51% of any proceeds should we ever sell our business. If you were expecting us to be coy about trying to sell our business then you’d be wrong - our “For Sale” signs have always been up and unashamedly always will be. Obviously, our employees, founders and investors would also see a return here, but we see this as our best shot of raising at least £1m for the social initiatives we have nominated. However, naturally, we would only ever negotiate with the right party on the right terms at the right time.

What about votes and dividends?

The CC shares do not carry votes in the same way the ordinary shares do. This is not a cavalier act to allow Counter Culture to conduct rogue activities that are at odds with the virtues of the CC shareholders, but simply to not overburden the CC shareholders with process. All CC shareholders can nominate board meeting observers with full transparency of our business activities.

CC shareholders are not entitled to dividends, however, again, this is not a money grab. Instead it makes more sense to distribute a percentage of our sales directly to charities instead. Counter Culture has a commitment to donate 5% of all it’s revenues to charity, many of which will include the CC shareholders. This results in upfront payment to the charities now as sales are made, instead of waiting for profits to be declared in the future. Also, we are unlikely to be distributing any profits any time soon since these would instead be reinvested into the business.

Will it work?

Don't know! We are yet to discover anything that resembles a company structure like this so there are lots of unknowns. It is likely to cause some head scratching for prospective investors into our business in the future. Counter Culture is also a relatively new enterprise, so there are reputational considerations for any charity or CIC thinking about associating themselves with Counter Culture in this way.

But this is all part of why we're doing it. We believe it fits within our values of advocacy, audacity, compassion, curiosity, honesty and unconventionality. It may not be perfect, but it might break some ground in a new way of entrepreneurial thinking about how value generation can be assigned and gifted. That's enough for us to think it's worth giving it a go.

Intrigued? Come follow the Counter Culture to see how it all unfolds.