A broad solution set
As indicated on our home page, stand-alone small businesses lack critical mass to realize access to the kinds of resources easily available to larger companies. There is one way in which individual small businesses can achieve that access and that is by banding together as a group such that the group can act as a single larger company. The question is, how best to achieve that collective effort.
After much thought and effort focused on the above, Commonwealth Group has developed a new approach to nurturing small business, initially modeled on one of the world’s most successful companies – , a public that owns numerous subsidiaries (both wholly owned and partially owned).
However, whereas Berkshire focuses on large companies (both public and private), Commonwealth Group has developed the idea of holding companies that focus on investing in and owning Main Street small businesses. And for various reasons covered elsewhere on this website, we concluded that there are times when a holding company should be formed as a for-profit corporation (like Berkshire) and other times when it would be more appropriate to have that holding company be a non-profit corporation.
We call the for-profit type of (public) holding company Small Business Holding Companies (SBHCs), to distinguish them from companies like Berkshire and most other public holding companies. You can see more information about SBHCs under the menu section titled SBHCs. We introduce this SBHC idea in this LinkedIn Pulse article . For an exploration of the original premise that led to the creation of SBHCs, see this approximately 25 min video.
With respect to our non-profit version of a holding company, we call them Community Commonwealth Corporations (CCCs). You can find more information on CCCs in the menu section titled CCCs.
The key purpose of both SBHCs and CCCs is to leverage the tools normally only available to large companies, particularly for-profit public companies. SBHCs and CCCs will have enhanced access to capital, credit and other resources and can in turn, make those resources available to smaller companies who would have difficulty getting access to them on their own.
And both SBHCs and CCCs will be established and run with sustainability and triple bottom line as core to their very existence, designed to appeal specifically to the impact investing community. Because CCCs are non-profit corporations, they are born with a public benefit purpose. The way we achieve that same objective with our for-profit SBHC corporations is by establishing them as benefit corporations (or equivalent).
SBHCs will raise money via token sales (see below) from the general public as a public company and using it to invest in and provide a wide spectrum of support services to their small company subsidiaries. CCCs will raise money from the general public also using token sales, but in a fashion somewhat different that SBHCs.
See Digital Tokens for how both can raise money from the public.