Presumed Abundance: funding it forward

04/10/2010

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(repost from http://ourfutureistbd.com/issues/presumed-abundance)

The law of scarcity isn’t just about economics; it’s psychological, too. There’s often more than enough (cake, seats on the train, whatever), but it’s all downhill once we start fighting for our share of the pie. That’s why one investment fund is flipping our collective perspective from scarcity to abundance.

Presumed Abundance offers startup capital to profit-driven social enterprises — with a twist: they don’t keep the money from the sale of your company. Instead, it goes straight into the fund. When you make your millions, you join them as angel investors in other social ventures; you collectively decide how to invest the money derived from your success.

The idea was born out of frustration with the confrontational paradox of traditional investment: “You, an entrepreneur with an idea for making the world a better place, meet an investor who has the capital to make it possible. You each recognize the value that the other brings to the table. The moment you sit down to negotiate term sheets, that all changes. You are no longer thinking about starting a relationship; rather, you are preparing for its eventual end. We turn that zero-sum thinking on its head. Amazing things happen when you stop planning the break-up and start planning a future together.”

The founders’ idea of success isn’t a bigger fund (in fact, they’re already turning down money); it’s the replication of their funding model, working toward the presence of a Presumed Abundance clause in every social venture contract. Trading scarcity for abundance, we can move the best ideas forward together. Sounds like a good deal to us.

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