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Episode 54: Grassroots Fundraising with Tom Moroz

Episode 54: Grassroots Fundraising with Tom Moroz

On this episode of the Capital Insight Podcast, Tom Moroz, founder and director of Stonehedge Holistic Learning Center, shares his journey with grassroots fundraising and the challenges and surprises he’s encountered along the way.

Tom is a finance professional with over 30 years of experience. Last year he helped lead an effort to transform Stonehedge Gardens, a landscaped sanctuary in Pennsylvania that aims to bring people together to heal and inspire, from a charitable nonprofit to a social enterprise by adding a public benefit corporation with revenue-generating activities. He reached out to The Kassan Group for guidance on how to raise investment funding to grow Stonehedge and help it become financially sustainable. Stonehedge is currently raising funds through investment crowdfunding.

Reflecting on the process of launching his grassroots fundraising campaign, Tom says it has been educational for both him and his team, as well as for potential investors who are unfamiliar with the concept of crowdfunding. In return, he’s been surprised by who is interested in supporting his business venture. “It’s gratifying to know that what we’re offering is a value to the community and that they really want to be a part of it both financially and in participation of what we’re doing.” Listen to the episode to learn more about Tom’s journey in crowdfunding.

Tom Moroz has been connected with the Stonehedge vision since he was a teenager and was a close friend of both of the original founders. He has an MBA-Finance and brings over 30 years of corporate finance experience from both the for-profit and non-profit sectors. He was a management consultant for Deloitte, an international accounting firm, and was the head of finance for a large hotel operation in NYC as well as the head of regional finance for the Open Society Foundations, an international human rights foundation with an annual operating budget of nearly $1 Billion.

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The Capital Insight podcast intro and outro is voiced by Marina Verlaine. She can be contacted at reel.peach.vo@gmail.com

How to fairly split the equity pie

How to fairly split the equity pie

You’ve founded a company and you want to bring on some helpers and compensate them with equity. How much equity should you give them?

Most founders pull a number out of a hat when making this decision and hope for the best. This can lead to lots of problems, especially when you give different amounts to different people. Someone who gets less than someone else might feel undervalued and lose motivation. Hurt feelings and resentments can poison the company culture.

One of my clients recently told me about an approach to this issue called Slicing Pie. Slicing Pie works by tracking everyone’s contributions of time, money, resources, etc. and does not split the equity until a trigger event, such as raising money from investors, occurs. This means that the equity you receive reflects the actual contributions you made to the company.

I recently drafted a legal agreement for Slicing Pie. The way it works is that all early company helpers receive an equal amount of equity, but the equity doesn’t vest (i.e. become truly owned by the shareholder) until a trigger event. The amount of equity that vests depends on how much time, money, and resources each helper ACTUALLY contributed before the trigger event.

This method of dividing equity makes so much more sense because everyone understands up front what they need to do to earn more equity – there is nothing arbitrary or unfair about it. It also serves as a great motivator for contribution.

To your success!

You’ve founded a company and you want to bring on some helpers and compensate them with equity. How much equity should you give them?

Most founders pull a number out of a hat when making this decision and hope for the best. This can lead to lots of problems, especially when you give different amounts to different people. Someone who gets less than someone else might feel undervalued and lose motivation. Hurt feelings and resentments can poison the company culture.

One of my clients recently told me about an approach to this issue called Slicing Pie. Slicing Pie works by tracking everyone’s contributions of time, money, resources, etc. and does not split the equity until a trigger event, such as raising money from investors, occurs. This means that the equity you receive reflects the actual contributions you made to the company.

I recently drafted a legal agreement for Slicing Pie. The way it works is that all early company helpers receive an equal amount of equity, but the equity doesn’t vest (i.e. become truly owned by the shareholder) until a trigger event. The amount of equity that vests depends on how much time, money, and resources each helper ACTUALLY contributed before the trigger event.

This method of dividing equity makes so much more sense because everyone understands up front what they need to do to earn more equity – there is nothing arbitrary or unfair about it. It also serves as a great motivator for contribution.

To your success!

What is a Social Enterprise?

What is a Social Enterprise?

CORE Foods team

A social enterprise is a business (for-profit or nonprofit) that, in addition to striving to be profitable, takes actions that in some way make the world a better place. Such actions could include paying a living wage, using environmentally friendly practices, supporting improvements in the business’s community, and so on.

I often refer to such businesses as socially responsible, heart-centered, or mission-driven enterprises. In fact, if you read my blog posts or get to know me to any degree, you’ll often hear me use the terms interchangeably.

While it may seem like a delicate balance to pursue profit while also contributing to a better world, plenty of organizations have been successful in pursuing this business model. And so can you! In fact, evidence exists to support the notion that socially responsible businesses can actually be more profitable than businesses focused solely on profit.

Structurally, as I mentioned, social enterprises can be organized as for-profit or non-profit companies. Depending on the country or locality in which they are established and the preferences of their founders, they may choose to organize themselves as co-operatives, traditional corporations, limited liability companies, benefit corporations, community interest companies, or charitable organizations, to name just a few possibilities. Some create “hybrids,” combinations of two or more entities that work together to achieve the business’ goals.

These days, because of growing public outrage over socially irresponsible companies, many businesses say they are socially responsible. But are they really?

The truth is, many companies add socially responsible activities to their operations because they perceive that, by doing so, they will make their overall conduct more palatable to consumers. In other words, social responsibility does not drive the mission of these organizations. Such activities are added as icing on a cake to make it sweeter to the consumer. From a terminology standpoint, such companies are not social enterprises but merely organizations that operate various “corporate social responsibility” programs.

True social enterprises place mission at the center of everything they do. Many codify their missions into their charter documents. When they raise money from investors, they ensure, through properly drafted agreements, that the investors will not interfere with the long-term pursuit of the company’s mission.

There are infinite ways in which social enterprises can be structured and investor agreements drafted. And there are many wonderful examples of companies that have designed very creative structures to ensure long-term fidelity to mission, even after bringing on investors. Here are a few great examples:

It is a great time to be a social entrepreneur!

Many organizations have already led the way, and you can stand on their shoulders.