Jennifer Rohleder on Not-Just-for-Profit Business

Jennifer Rohleder

Jennifer Rohleder, Attorney and Investor

Jennifer Rohleder is busy. In addition to her environmental technology law practice, she is General Counsel at daGROUP and is involved with LifeCycle VC and the Piranha Tank investment show.

I discovered her via social media and learned that we share several interests including the potential for businesses to have positive social and environmental impacts, sourcing appropriate capital, demystifying the investment process, and taking a systems approach to understanding business dynamics. Jennifer was gracious enough to speak with me recently about the myriad ways in which she is supporting not-just-for-profit business in her community.

A Comprehensive Perspective on Sustainable Business

From a financial perspective, profit is required. But when you look at the second layer of what a business is producing versus what it’s extracting, the business should be providing some greater environmental or societal value.

A friend of mine once told me, “Making a profit means you get to continue working.” My co-founder, Laura Black, long ago concluded that profit isn’t the purpose of business; it’s a requirement for business. Profit is a constraint. The valid purpose of business is to make our lives better. It’s for that reason we organized Human Scale Business as a benefit corporation. Our social purpose – Business Education for the Rest of Us™ – is baked into our articles of incorporation. So, it should come as no surprise that we applaud Jennifer’s focus on businesses that contribute beyond their responsibility to turn a profit.

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Sensible Sharing of Equity Ownership

I was intrigued to learn that Jennifer was a “Slicing Pie Friendly” attorney. I had no what that meant, but it sounded different and cool.

She explained that Slicing Pie is a method for sharing ownership in a bootstrapped startup dynamically and, as a consequence, equitably. The method was developed by Mike Moyer, an entrepreneur who teaches at Northwestern University and the University of Chicago. Jennifer helps young companies implement the system.

The premise is straightforward: different people make different contributions to a new company over time. Sometimes that is cash; sometimes it is time, relationships, ideas, or the use of assets. Here’s how Moyer explains it:

I’ve no personal experience with how well the Slicing Pie method works. However, I’m very familiar with the challenges of conventional equity allocations. Establishing equity shares upfront in fixed proportions can cause friction unless there is a good mechanism for adjusting shares over time.

The only thing we do know at the beginning is that nothing is going to look the way we think it’s going to look once we get to a more mature business.

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Piranha Tank

I’m not a fan of the Shark Tank show. For starters, it conflates successful fundraising with business success. I’m not bashing investors. After all, I spent the first part of my career as an LBO lender and private equity investor. Most businesses need external capital at some point to support their growth. That’s no reason to romanticize the investment process – or make it opaque for the purposes of creating reality show drama. Consequently, I was more than a bit suspicious of Jennifer’s involvement with a show called Piranha Tank.

When I checked out the Piranha Tank website prior to my conversation with Jennifer, I experienced cognitive dissonance. Here was Jennifer’s colleague, Gore Bolton, talking about the importance of “margin and mission.” Furthermore, applicants don’t have to air their pitches in order receive investment capital. What kind of reality show is that?

In Jennifer’s words, the difference relates to community building focused on people, the planet, and profit in a transparent forum.

We do all of our Piranha Tank events live, onstage, in front of an audience. We’re peeling back the curtain on what those deal-making meetings really look like.

I appreciate what she and her colleagues are doing with Piranha Tank. (I still struggle with the name.)