Steward ownership is a relatively unknown concept in the Netherlands, but it is gaining recognition. More and more entrepreneurs are exploring whether this business model is right for them.
For NOM, the investment in Team050 was its first practical experience with a steward-owned company, and we’re happy to share that knowledge. Investment analyst Michael Toxopeus takes you through this new form of ownership and the key considerations from an investment perspective.
What is steward ownership?
In traditional investments, returns, value growth, and future exit opportunities often play the most important role. With steward ownership, the focus is different. Legal ownership and economic ownership (profit and value) are separated. Profit is not an end in itself, but a means to pursue the company’s mission and ensure its continuity.
Steward ownership is not a formal legal structure, but a principle that can be implemented in various legal ways. A commonly used arrangement is the “golden share”: an external foundation holds a special share with voting rights and can intervene when the company’s mission or independence is at risk. This keeps money and control separate.
Well-known international examples include Bosch, Patagonia, and Novo Nordisk. In the northern Netherlands, we have Voys. We wrote an article about this earlier. Other well-known steward-owned organizations in the Netherlands include TBI, De Efteling, and Remia. The concept is also gaining political attention: the House of Representatives is working on a corresponding legal form, the “steward company.”
Independent and mission-driven
Many entrepreneurs build their businesses based on their own vision, culture, and way of working. Steward ownership helps safeguard those principles by placing control in the hands of the people who built the company and know its mission from the inside out. Or, as Team050 puts it: “Who better to safeguard the principles I started with than myself?”
That does require some preparation. Setting up a steward-owned structure requires sound legal framework and clear governance agreements: who are the stewards, how are they appointed, and how is the mission specifically monitored?
However, raising external funding does not necessarily mean relinquishing control over the company’s direction. The structure ensures that the company retains its mission and independence even with new investors.
Investing in a steward-owned company
Investing in a steward-owned company requires a different mindset than usual. With conventional investments, control provides the leverage to make adjustments when necessary. In a steward-owned company, control is organized differently—for example, through the stewards and an independent foundation. Investors have less control than they are normally accustomed to. In addition, many steward-owned structures operate with a capped return for investors.
Both aspects require a willingness to deviate from what is normally the starting point for investors. For NOM, this approach aligns well with the way we view investments. In addition to a sound business case, we look at the contribution a company makes toward a stronger, more innovative, and future-proof Northern Netherlands. This aligns well with the long-term nature of steward ownership.
Lessons from a First Investment
Team050 opted for steward ownership to keep control in the hands of its own people and remain true to its mission, in a healthcare market where acquisitions are becoming increasingly common. During the process, it became clear that the willingness of both parties to think outside the box was a key factor in the project’s success. The focus was not on the legal structure or the financial terms, but rather on whether the entrepreneur and the investor were willing to work together to find suitable solutions.
From the very beginning, NOM and Team050 shared a clear alignment in terms of social ambition and regional commitment. This provided the process with a solid starting point. The stage of the company’s development also plays a role in this. Team050 is a mature small-to-medium-sized enterprise, which allowed for a different balance between control and return on investment than would be the case, for example, with a startup.
These principles will vary from case to case. Steward ownership was uncharted territory for NOM. Precisely because of this, the process yielded valuable insights. It offers real opportunities for mission-driven companies seeking capital without sacrificing their independence.
Want to learn more about steward ownership?
Are you an entrepreneur considering a steward-owned structure, or would you like to know what this means for the funding process? Feel free to contact Michael Toxopeus.