The desire for profit has replaced problems solving as the top priority in the engineering industry. We have recognised that profit is a primary motivator, and we can use that to our advantage. We can positively motivate the industry to shift to sustainability, social responsibility, and participatory innovation by aggregating small amounts of money from a group of contributors to re-invest into companies, education programs and social organisations. The ‘Social Hedge Fund’ would be for-profit, in which the profits are re-invested into new innovations, programs and companies. This guarantied stability for our Fund while influencing positive changes within the industry.
Competitor Analysis and Market Research
We aim to distinguish ourselves from other competitors. We have identified three areas that existing solutions are lacking, which our Fund will deliver. These are:
1. Unlike other charities and similar initiatives, we are a for-profit organisation.
2. A dedicated budget to fund socially conscious efforts that don’t generate profit necessarily.
3. Public engagement in voting on projects and board members, to encourage participation and make our initiative fully democratic.
We provide two different investment bands:
1. Under £10: small donations are put towards not-for-profit initiatives such as education etc.
2. Over £10: to be invested for profit.
Any profits will be made serviceable, so divided into dividends to be paid back to investors, excluding Social Hedge Fund’s overhead costs and re-investment schemes. The key is having the ratio of investor dividends to overhead and re-investments schemes be competitive to traditional hedge fund schemes, thus enticing investors to choose this just as much as they might invest in other projects. However, we wish to maximise participation by enabling small individual contributions as well as large contributions from pension schemes, saving schemes and state funds.
There will be three investment options with varied returns:
1. Socially or environmentally conscious efforts that don’t strictly produce profit, including education programs and alternative fuel research etc.
2. Start-up or Innovation funding for companies in line with our ethos.
3. Established company investments and stock trading to generate profits, such as Tesla.
There would be voting mechanisms for each one of the divisions, particularly start-up funding.
The hedge fund team would review all the ideas and award the top three teams with the three highest levels of funding, with other projects receiving smaller amounts.
The order in which funds are allocated will be voted by investors. Equal voting rights will be allocated to satisfy democratising positive change.
All investments will be anonymous to avoid back channelling and commitments unsympathetic to our mission. To avoid cancel culture, we will focus on the clarity of what the hedge fund is.
To be democratic, a board of advisors will be elected. People will be nominated based on their skills and vision, and 12 will be chosen by the operators of the fund. The board of directors will be selected based on a combination of skills, to suit our 3 funding schemes. They will include financiers, social entrepreneurs and so on. The public would be asked to vote on a Chief Executive for one election cycle of three years. Three years is long enough for the Chief Executive to gain experience and establish a relationship with the company, but not too long that the process feels anti-democratic.
In conclusion, we want to democratise positive change and change the engineering industry for the better.