Building The CI Corporation
This is an early brief for our work in developing an alternative model for the CI corporation.
The existing venture capital / startup ecosystem prioritizes businesses that are asset-light, high-growth, short-term, software products. This covers some of what is good for the world, but leaves many things out: hardware, science, public goods, high-risk experiments, infrastructure. Top VC funds have more and more overlap in their portfolios, and the venture approach is becoming increasingly consolidated as the ecosystem grows. This would be fine if VC funding was a niche pursuit for a small class of technologies, but it isn’t: $612 billion in venture capital activity was invested globally in 2021. And perhaps more importantly, the VC approach has been adopted by governments and philanthropies alike, with entities from In-Q-Tel to VentureEU aiming to move towards Silicon Valley venture approaches.
Existing approaches to VC are only one way of looking at the world—only one way of determining what technologies are valuable, and what risks are worth taking. When applied to societally-consequential, infrastructural projects, our current funding and governance models fall short. Existing financialization models have trapped us into only funding certain technologies, with a constrained set of stakeholders, outcomes, and possibilities. We need a better container in which to build the future of technology, be it satellites or space travel or AI research. Other approaches are necessary to build towards a future of collective flourishing: approaches that intentionally incorporate the public good, that factor in exponential returns from advances in AI, that build shared infrastructure, that prioritize steady returns over massive growth.
Our goal is to accelerate the development of an alternative ecosystem, and experiment with different ways of allocating risk and reward. In this, we are partnering with the AI Objectives Institute and to.community. We will extend existing experiments, from open source projects to benefit corporations to focused research organizations (FROs) to perpetual purpose trusts to cooperatives to decentralized autonomous organizations (DAOs). Existing startup and VC models are products of real innovation: new approaches to employee stock ownership, vesting schedules, SAFE agreements, even stakeholder input. But they are ill-suited to the task of broadly enabling accountable, valuable technology progress in the collective interest. Our mission is simple: to do better.
Appendix: Explorations into alternative financing models
1. Token distribution / ICOs
Core idea: Token distribution allows for various groups of stakeholders to stay involved in blockchain projects. Tokens may grant governance rights and decision-making ability, or may simply be financial vehicles for shared ownership.
Implementation: Blockchain projects distribute tokens in different configurations—with different amounts of tokens distributed to their own communities or foundations, to VCs or investors, and to the public.
Readiness level (1 least - 9 most, see source): 7
2. Worker and stakeholder equity
Core idea: Worker equity is the practice of granting stock to workers as part of their compensation packages; stakeholder equity can be distributed to different forms of stakeholders. Equity distribution alongside governance rights can be a pathway to collective financing.
Implementation: Many Silicon Valley firms use employee stock option pools (although they’re relegated to certain types of workers).
Readiness level (1 least - 9 most): 9
3. Perpetual purpose trusts (PPT)
Core idea: Stock ownership of a company is transferred into a trust, with a well-defined mission that will not change hands as the business grows and changes. The company’s purpose, rather than individuals, becomes the official beneficiary of the company. (Source)
Implementation: There are a range of trust agreements that are possible to define the purpose, stakeholders, distributions of profit, and mechanisms of governance, e.g. from Purpose Foundation. The Trust Stewardship Committee (TPC) is introduced to ensure adherence to the mission.
Readiness level (1 least - 9 most): 7
4. Foundation ownership
Core idea: Foundation-owned companies are nonprofit institutions that combine business ownership and philanthropy. The foundation has a duty to ensure that the strategy of the company is inline with its statutes.
Implementation: There are a range of models for foundation ownership; many optimize for tax purposes or ensuring that wealth stays within borders, while others intend to keep the operations of a firm in line with a particular set of values. (Source)
Readiness level (1 least - 9 most): 7
5. Cooperatives (worker co-ops, platform co-ops, etc.)
Core idea: Cooperatives are jointly owned and controlled by workers, platform cooperatives are a subset of worker co-operatives that are centered around platforms (ex. the Driver’s Co-op).
Implementation: Worker cooperatives have existed in some form for centuries, although new structures are being developed to expand the concept to the digital age.
Readiness level (1 least - 9 most): 9
6. Traditional forms of crowdfunding
Core idea: Create campaign for crowdsourced funding for a project, initiative, event, etc. Can come with ownership or rewards for contributors, although often not in the form of long-term stake.
Implementation: Various platforms for crowdfunding exist (ex. Kickstarter, Indiegogo, Patreon, etc.).
Readiness level (1 least - 9 most): 9
7. B Corp certification / benefit corporation
Core idea: Privately certify for-profit corporations based on their social and environmental performance, along with some language for the interests of (non-shareholding) stakeholders written into governing documents.
Implementation: Certified B Corporations are for-profit companies verified by B Lab, a nonprofit organization. Verification occurs every 3 years, along with a registration fee.
Readiness level (1 least - 9 most): 9
8. Traditional nonprofit
Core idea: A legal entity which is constrained to put excess revenues toward a social, collective, or public benefit rather than private profit. Typically governed by a board of directors.
Implementation: Financing for nonprofits usually arrives through grants and donations. Donations to 501(c)3 entities in the USA are tax-deductible, constituting a large tax benefit for private donors.
Readiness level (1 least - 9 most): 9
9. Exit to community (E2C)
Core idea: Develop alternatives to the standard model of the startup "exit." Rather than simply aiming for an acquisition by a more established company or a public stock offering, build structures for startups to mature into ownership by their community of stakeholders. (Source)
Implementation: There is no one-size-fits-all E2C model. Many of the below structures, particularly trusts, cooperatives, and shared ownership models, enable progressive exits to invested community members over time.
Readiness level (1 least - 9 most): 3
10. Capped returns
Core idea: Whenever investors or entrepreneurs receive equity in a business the total returns on the equity are capped. The returns should be fair but they do not result in a perpetual claim on the profits of the venture. (Source)
Implementation: Whenever a company issues shares, it writes a matching call option where it is required to repurchase the shares at an agreed upon price.
Readiness level (1 least - 9 most): 2
11. Windfall distributions
Core idea: A company or consortium makes an ex ante commitment to donate a significant amount of any eventual extremely large profits, with the threshold agreed upon ahead of time. (Source)
Implementation: Still theoretical (major AI firms have considered adopting, particularly OpenAI). Would require external enforcement mechanisms beyond purely internal commitments.
Readiness level (1 least - 9 most): 2
