Ways out of the growth trap

You don't have to play the venture-capital game to build a company that lasts — and you can even "hack" the financial system itself by founding alternative financial products. That's what this second part is about.

In the first part of my introduction to post-growth entrepreneurship, I looked at the basics of today's financial system and identified financial extraction as the root cause of the current growth paradigm. The glorification of venture capital (angel investors, unicorns, and so on) and the exit as the ultimate success feed straight into that system.

Before we look at alternative financing models and company structures, I want to clear up the myth that social and ethical approaches are necessarily less viable than "business as usual." If anything, you can make the case that these common-good-oriented companies are economically more successful.

For one, without venture capital you're forced to concentrate on the business model itself — to identify a real need and survive in the market with genuine product-market fit. Without outside capital, you depend directly on revenue from product sales ("revenue-based growth").

For another, control stays with the founding team, because no shares are sold. There are no reports to write for investors and no interest to pay off. Instead, you can focus entirely on the product — a real competitive advantage.

Extractive and exploitative business models aren't inherently more economical. That assumption is a narrative meant to justify their existence.

Securing the company's mission

Once you've built your company without outside capital (bootstrapping), the next task is to secure its mission for the long term. There are already plenty of successful examples that show how it's done. (And just as many that show how mission drift pulls companies in directions their founders never intended.)

Steward ownership

Steward ownership means separating voting rights from profit rights. This prevents sale and exit, and dissolves the conflict between profit maximization and the company's mission. Well-known examples are Ecosia, Wildplastic, and Goldeimer.

Exit to Community

"Exit to Community" describes an approach where companies aren't sold to external investors but transferred into shared ownership — for example by users, employees, or the local community. The goal is to democratize decisions and leave the profits with the people who create them. A prominent example is the Drivers Cooperative in New York, where the drivers are also the owners of the platform and benefit directly from the profit it generates. Related concepts include the cooperative, the platform co-op, and community ownership trusts.

These and similar structures prevent mission drift by involving stakeholders in decision-making, and they reduce capital flight. Long-term company success is pursued instead of short-term scaling and selling.

It's important to put these structures in place early, because the past has shown again and again that with growing scale and capital inflow, systemic dynamics often set in that push companies in a direction never originally intended. I'm fairly sure the founders of Ankerkraut didn't set out to sell to Nestlé. OpenAI transformed itself from a non-profit organization into a for-profit corporation.

Charlie Munger's line fits here again: "Show me the incentive, and I'll show you the outcome." We have to protect ourselves against the wrong incentives early — and lock our company in legally against them.

Transforming the financial system

Another point of intervention for advancing a post-growth economy is the financial system itself. Here too, new non-extractive financial products can be created that lead to a redistribution of wealth and fewer externalized costs.

Before I start with an example, I want to briefly contrast today's financial system with the post-growth economy. I'll use PG as shorthand for post-growth and CFS for the current financial system.

Criterion	Current financial system (CFS)	Post-growth economy (PG)
Focus & metrics	Quantitative growth, GDP, returns. Tension between return on capital and planetary boundaries.	Qualitative growth. Dissolving the growth imperative.
Objective	Profit maximization, return on capital, competitiveness.	Advancing the common good through social justice and ecological sustainability.
Financing & value creation	Banks and venture capital. The financial system is 4–10 times larger than the real economy. Largely driven by speculative derivatives trading.	Regenerative financing through real value. Overlap between shareholder and stakeholder.
Time horizon	Short-term, exponential growth imperative.	Long-term, regenerative, and cyclical thinking.

In my view, withdrawing from the financial system to live as a hermit is about as logical as refusing to vote in an election. Instead, I see it as my responsibility to point out real alternatives and put them into practice. So, as promised, let's get to a few flagship projects of the post-growth finance movement.

Flagship projects and the democratization of finance

Ironically, one of the most effective financial products against financial extraction comes from the founder of Vanguard — today the world's second-largest asset manager. Vanguard currently manages around 9 trillion US dollars. If every resident of Germany chipped in about 100,000 euros, that would add up to exactly this amount.

In 1975, John C. Bogle founded the first index fund with the goal of giving investors low-cost, transparent investment options. Instead of skimming money off them through expensive management fees, he bet on a passive investment strategy that simply tracks the market. With that, Bogle laid the foundation for a revolution in finance that protects investors from excessive financial extraction.

In 2023, the assets invested worldwide in index funds (ETFs) stood at around 11.4 trillion US dollars. Total global assets under management came to roughly 127 trillion US dollars in 2025. Index funds therefore make up about 9% of globally managed wealth — an enormous sum invested in low-cost, passive products and so largely shielded from inflated management fees.

The asymmetric power balance of voting rights

With this much passively managed wealth, another fascinating dynamic opens up: while more and more people can take part in financial markets at a low threshold through index funds — democratizing returns — the voting rights remain withheld from them by the large asset managers. When I invest in an index fund every month, I'm not directly buying shares in the individual companies; I'm acquiring units in a fund manager who holds the shares for me.

So the voting rights of those shares don't pass to me — they stay with the fund provider. These managers vote at the annual general meeting on behalf of millions of investors. The decision-making power therefore still lies with a few large players.

But wait — it gets more absurd: these asset managers don't have the capacity to prepare for every general meeting, or they want to save resources. So what do you do as a profit-oriented asset manager? You outsource the research and decision-making to so-called proxy advisors. These advisors analyze corporate strategies, compensation reports, environmental targets, and so on, and issue voting recommendations. These are often adopted automatically.

And the market for proxy advisors is better described as a duopoly: ISS (Institutional Shareholder Services) and Glass Lewis together hold 90% market share (60–65% and 25–30% respectively).

And so it happens that a large share of global corporate policy is decisively shaped by two companies. Regulation and oversight aside — this is an extremely asymmetric power balance. Who really decides — and in whose interest?