Start-up expertise
MAM-Partners designs
contemporary corporate culture
We are convinced that good employees are the most sought-after resource in the modern knowledge society. Human capital has thus replaced financial capital as the scarce resource. However, the prevailing corporate and labor laws do not account for this evolvement.
Our model of human capitalism transfers the proven principles of corporate law to the integration of human capital. Employees contribute human capital, shareholders contribute financial capital – both pursue the same goal: to invest/apply their capital as profitably as possible.
Implementing a human capitalist-driven corporate culture is challenging and, in the context of our prevailing corporate, tax and labor laws, legally demanding.*
Our proven “Company and Compensation Model” (GVM) is the solution
The GVM is a comprehensive, coordinated concept with many important building blocks (e.g. articles of association, shareholder agreements, employment contracts and employee profit-sharing programs, etc.), which we adapt to the specific needs of our portfolio companies, providing support in the implementation and continuous adaption.
*MAM-Partners AG is not allowed to and does not provide any legal or tax advice.
Start-up expertise
The essence of our
company and compensation model.
Our GVM understands an enterprise as a joint venture of capitalists and human capitalists – both pursue the same goal: to deploy their capital in the most value-creating way possible.
The GVM builds the company on two independent pillars – the capital providers and the workforce (human capital providers). Both participate in the company’s success in accordance with a long-term, binding agreement on proportionality. In doing so, the GVM transfers proven regulatory principles of corporate law to the organization of human capital (information rights, profit participation rights, shareholders’ meeting as a controlling body, voting rights, protection against dilution, protection of minorities, etc.).
Start-up expertise
The main advantages of the GVM are:
The company is built on two independent pillars. The potential for conflicts between founders, financial shareholders and the workforce is sustainably eliminated. This includes an effective minority protection without loss of control for the founders. The company becomes more valuable and attractive for employees, business angels, VCs and customers.
The long-term and binding participation of employees in the company’s success makes it possible to enforce low base salaries. The company’s capital is thus conserved in the start-up phase and the companies thus tap a financing contribution from human capital. At the same time, the reduced capital requirement avoids a strong dilution of the founders’ shares in the first financing rounds.
The perception of unfairness in pay is the most common source of frustration and lack of intrinsic motivation in the workforce. The GVM ensures a sense of fairness, eliminates the culture of envy and promotes cooperative rather than competitive teamwork. Self-determined work is encouraged, flat hierarchies become easy and sensible to implement. This creates ideal conditions for a working environment characterized by agility.
The initial implementation of a GVM is work intensive, but over time it saves significant management resources. Lengthy bonus negotiations are eliminated. Feedback discussions are no longer bonus negotiations in disguise, but focus on the essential question: How can we improve together?
Without allowing the workforce to participate in the company’s success on a sustained and upwardly unrestricted basis, the best employees have no choice but to found their own companies in order to realize their human capital potential. The GVM ensures that each generation of employees experiences over the course of their careers a similarly attractive participation in the share of the company’s success reserved for human capital as the founding generation did. Thus, a long-term succession mechanism is an integral part of the GVM.
For various reasons, we recommend restraint with the distribution of company shares to employees, which is common practice in the start-up scene. Primarily, because it is the role of the shareholders to provide capital. But also, because shareholders can only protect themselves from disproportionate dilution in subsequent capital increases by pulling in fresh capital. Conflicts are inevitable when employees with a weak capital basis become shareholders.
Start-up expertise
Increase the value
of the company for all stakeholders
The GVM is a powerful set of tools that founders can use to make their company more attractive to both shareholders and employees, thus increasing their chances of success in the long term. GVM increases the value of the company for all stakeholders. It unleashes the intrinsic motivation of the workforce. It provides an institutionalized framework for attracting and retaining outstanding talent, opening up new opportunities for startups to attract expensive human capital without having to raise highly dilutive venture capital.
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