Where unicorns fear to tread — building businesses that are better for the world

A short history of Zebras Unite

Astrid Scholz
Zebras Unite


The following was written as a contribution to a book that’s coming out later in 2020 or 2021, where it will appear in a significantly abbreviated version. The editor kindly allowed me to publish the full length draft, so here goes!

Mara Zepeda, Aniyia Williams, Astrid Scholz, and Jennifer Brandel © Adrian Hallauer


There must have been something in the water and the air in San Francisco that sunny October in 2015. Outside the annual gathering of the social impact intelligentsia at SOCAP, two longtime friends and public radio reporters-turned-entrepreneurs, Jennifer Brandel (CEO & Co-founder, Hearken, which works with newsrooms) and Mara Zepeda (CEO & Co-founder, Switchboard, which works in education), were sitting on a dock in Fort Mason, took off their uncomfortable shoes, and started trading war stories about the challenge of funding our startups.

Meanwhile, in a session room inside SOCAP, my team at Sphaera (which works in philanthropy and international development) were leading an ad hoc marketplace to match social entrepreneurs with scalable solutions and impact investors interested in funding the same, as a way of simulating the kind of user experience we both wanted to have at SOCAP, and could support with our technology product in between and beyond in-person events. And elsewhere in San Francisco, Aniyia Williams was in the middle of an Indiegogo campaign for her wearable hardware company, Tinsel, and reflecting on her experience as a black female founder whose lack of access to family wealth and the white old boys networks of venture capital was typical of what so many women and founders of color experience.

All of our companies were in a financing purgatory: Social impact investors do not typically work in our spaces, and when they do, have a narrow theories of change that do not contemplate the kind of system interventions we were making in our respective industries. And venture capitalists won’t fund companies that cannot or will not promise 10x returns, and that are run by people who do not look like them. In essence, we had created for-profit companies with purpose and then discovered this type of company is basically unfundable in the prevailing paradigm. Furthermore, while gatherings like SOCAP attract thousands of people who share our sense of purpose and about creating for-profit companies that solve problems too big and urgent to ignore, the design of events like these is not conducive to actually encountering like-minded people. To wit, the four of us did not meet in San Francisco that fateful October, but a little while later.

Following their SOCAP conversation, Mara and Jennifer wrote “Sex & Startups” in February 2016, a blog post that made the case for alternative financing models for companies like ours. This cri de coeur garnered responses from hundreds of supporters, including Aniyia and me: we read it and felt like Mara and Jennifer were giving voice to the thoughts rattling around in our own heads. Thanks to social media and mutual acquaintances we were soon all connected to each other, and began the work that would lead us to Zebras Unite.

In Portland, Oregon, Mara and I began collaborating with other entrepreneurs on the creation of a progressive chamber of commerce, Business for a Better Portland, started for and by businesses like Switchboard and Sphaera, and founded an accelerator program and revolving loan fund for womxn entrepreneurs, XXcelerate. In San Francisco, Aniyia was drawing on her lived experience to develop Black & Brown Founders, a non-profit aimed at helping Black and Latinx founders launch tech businesses with modest resources and against the odds. In other words, we did what entrepreneurs everywhere do when they see a problem: we turned it into opportunity and set out to solve it, turning into capital and system entrepreneurs in the process.

Throughout the remainder of 2016, we also collaborated on a follow-up article to “Sex and Startups”, to offer a more complete alterantive to the unicorn: the zebra.

I say Zee-bruh, you say Zeh-bruh

Almost a year to the day, we published “Zebras Fix what Unicorns Break” in March 2017, and were promptly overwhelmed by the response. Over 10,000 founders, investors, lawyers, accountants, philanthropists, and others interested in startups reacted to the article, and our social media feeds blew up, with the overwhelming sentiment being “You described what I am / want to be / want to invest in.” We had given name to something that had been brewing for a while, a collective sense, albeit individually experienced, that something is deeply wrong with the prevailing narrative of startups and IPO-hungry founders, with their venture-fueled lust for market power at all cost.

In a few simple principles, we outlined an alternative narrative for “zebra companies” that, unlike their mythical cousins, are real; are both black and white, striving for both profit AND purpose; come in many different stripes, representing the diversity of their founders and the problems they are solving; are collaborative and feisty as they build businesses that are better for the world; and do so while taking care of their workforce, their communities, and their environment.

We developed a portrait of what a zebra company is, does, and stands for. This chart outlines how a zebra company compares with its mythical cousin, the unicorn:

Our central thesis is that the business model is the message, and

“that developing alternative business models to the startup status quo has become a central moral challenge of our time. These alternative models will balance profit and purpose, champion democracy, and put a premium on sharing power and resources. Companies that create a more just and responsible society will hear, help, and heal the customers and communities they serve.”

This message resonated with people from all over the world, and we soon found ourselves adopting the less US-centric pronunciation of Zeh-bruh, realizing that the movement to which we had given name wanted to be international from the get-go.

We had ended the article with a call to join us in building zebra companies, and the space for them to thrive, and close to a thousand people expressed their interest in coming to rainy, cold Portland in November of 2017 for an inaugural gathering of the dazzle, the delightful collective noun for a group of zebras. Of those we picked 250, a mix of post-revenue companies, investors, and interested others (turns out, there are lawyers and other service providers who specialize in zebras and are looking for community, too) for a two-day gathering called DazzleCon.

We designed the gathering to do three things: (1) articulate and discuss the key principles underpinning the zebra narrative with the help of the very thought leaders and practitioners who had informed our thinking, (2) gather the requirements and needs of zebra founders and funders to inform the shape and strategy of an entity that could support the movement going forward, and (3) facilitate some actual deals between zebra companies and investors (remember our frustration with SOCAP in that regard? Stemming directly from introductions we made at DazzleCon, zebra companies secured some $5 million in financing).

We succeeded with all three goals, and the key requirements that emerged from the gathering were for community, culture, and capital that support zebra companies. These three C’s form the pillars of the programmatic work of Zebras Unite, which we spent the better part of 2018 refining and fundraising around, while advancing the zebra narrative in speaking engagements, conducting several pilot programs, and spinning up our online community. The latter has quickly grown to over 5,000 people, with 45 local chapters in formation on six continents.

Towards Responsive, Regenerative Capital

Not surprisingly, and consistent with our lived experience as founders of zebra companies, the need for alternatives to venture capital is urgently felt in the zebra community, and central to the work of Zebras Unite. As many other commentators and innovators have pointed out, venture capital, while occupying the vast majority of the airwaves and the popular imagination, is suitable for only a vanishingly small number of companies with very specific, “unicorn” traits. Access to venture capital is further restricted by patterns of systemic exclusion for entire classes of founders by virtue of their gender, race, age, provenance, and education — for example, women founders receive around 2% of venture capital, even though women make up 50.8% of the US population, and black founders receive less than 1% (while making up 11% of the population). The statistics for immigrants, veterans, or older founders are similarly dismal.

These systemic access gaps also extend to bank financing, 95% of which goes to white men. In the last 10 years, since the financial crisis, other sources of early stage financing, notably community banks, have dried up or, as in the case of Community Development Finance Institutions (CDFIs) in the US, have adopted the underwriting criteria of regulated entities and insist on collateral and other guarantees that put, for example, women and people of color at a disadvantage. All in all, about 85% of all entrepreneurs in the US fall into the capital gap between venture and bank financing. Based on our surveys and conversations with zebra entrepreneurs and investors in other countries, the situation in the rest of the world is similarly challenging, pointing to a massive need to innovate capital instruments at a significant scale.

When couched in this larger set of developments, notably the disappearance of community banking capacity (to the tune of $1 Billion in my home state of Oregon alone), it becomes clear that the issue is not so much an “alternative” to venture and bank finance, but rather the need to grow entire new, diverse ecosystems of capital that are responsive to the needs of entrepreneurs and come in structures and sources that are conducive to building zebra companies, and at a volume that matters. We think of this capital as regenerative: capital that nurtures companies that in turn heal the systems in which they intervene, creating more financial, human, and environmental capital in the process. One hopeful development in this regard has been the emergence of funds like Indie.vc, which use revenue-based approaches to structure early stage investments that protect founders’ ownership and bank on the growing profitability to make their money back at more reasonable return expectations of 3–5x multiples.

Zebras Unite is tackling this capital innovation imperative by listening to the needs of entrepreneurs, and decoding the archetypes of capital needs, structures, and sources that would be helpful for fueling the 85% of companies that fall into the capital chasm. Whereas the approach of VC is to either make companies conform to the requirements of this flavor of capital or dismiss them, we are asking what the flavors of capital are that need inventing to meet the needs of zebra entrepreneurs. For example, we see a recurring theme of companies that, regardless of what stage they are at in their growth, could use a $250,000 — $1,000,000 tranche of strategic growth or operating capital to reach the next step of their long-term health. We think of this as ‘seed-size’, as distinct from ‘seed stage’, as this kind of financing could be useful for younger and more mature companies alike.

We are working towards a more comprehensive picture of these capital archetypes, with a view to developing a database that both informs the design of a decision-support tool by which founders and investors can find the capital sources and structures that are right for them, and the design of one or more zebra financial products that address specific capital gaps directly. One example of such a product is the XXcelerate loan fund, which makes character-based loans to women founders of between $25,000 and $100,000, using a proven model pioneered by Colorado Lending Source.

The example of XXcelerate is also an indication of how we see the role of zebra chapters in their communities: we believe that founders of a different stripe are best equipped to drive the capital innovation that founders in their community need. We are working with the Zebras Unite chapter leads on creating the tools and resources to help them do this important work of capital innovation, and are working with aligned philanthropists and investors on bringing the new mainstream capital into existence.


Sometimes people ask us “How do you do it all? How do you grow your own business while also launching new movements, and taking care of your family?” The real question is How do you not? How do you not systematically tackle all the systemic roadblocks that you find in your way as you build the kind of business you believe the world needs now? We are women, after all, so we see patterns, connections and interdependencies that the myth of the single-minded entrepreneur would have us ignore.

So of course we create the context and culture specific sources of capital and technical assistance to grow businesses like ours. Of course we create next generation chambers of commerce that advocate for the policies and enabling environment that businesses like ours need. Of course we seek the gaps in the current capital ecosystem that translate into massive opportunities once we create some structures and vehicles to channel capital. Of course we seek the company of and community with others because this is work done best in cooperation with others like us, to create a mighty groundswell, willing into existence the rising tide that lifts all boats.

And of course we pick a feisty, fearless mascot to accompany us on the journey: the zebra. Please join us! The company is dazzling.

Update 23 February 2020:

Zebras Unite is changing its stripes: we are becoming a cooperative, launching an investment management arm, and putting on DazzleCamp in May. Read all about it here.

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Astrid Scholz
Zebras Unite

Co-founder at @armillaria & @Zebras_Unite. Don't write here anymore, please find me at https://substack.com/@ajscholz