Here's a more granular breakdown of the capital stack and money flow:

1. Ubuntu Holdings (ESOP):
   • The ESOP owns a majority stake in Ubuntu Holdings, representing the collective ownership of the worker-owners.
   • The ESOP can be funded through a combination of worker contributions, company contributions, and external financing (e.g., loans, grants, or impact investments).
   • Dividends and profits generated by the cooperatives flow back to Ubuntu Holdings and are distributed to the worker-owners through the ESOP.
2. Cooperative-level financing:
   • Each cooperative (Ubuntu Apparel, Ubuntu Foods, and Ubuntu Energy) can raise capital through a combination of member equity, retained earnings, and external financing.
   • Member equity represents the ownership stake of worker-owners in their respective cooperatives and can be funded through member contributions or profit-sharing arrangements.
   • Retained earnings are the portion of profits that are reinvested back into the cooperative to support growth and development.
   • External financing can include loans from community development financial institutions (CDFIs), impact investors, or other mission-aligned lenders, as well as grants and subsidies from government agencies or philanthropic organizations.
3. Business unit-level financing:
   • Each business unit or division within the cooperatives (e.g., Organic Cotton Farms, Urban Farms, Solar Projects) can also raise capital through a combination of internal and external sources.
   • Internal sources can include allocations from the cooperative's retained earnings or member equity.
   • External sources can include project-specific loans, grants, or investments from mission-aligned funders or strategic partners.
4. Revenue and expense flows:
   • Revenue generated by each business unit flows up to the cooperative level, where it is used to cover operating expenses, service debt, and fund capital expenditures.
   • Surplus revenue at the cooperative level is allocated between retained earnings (for reinvestment) and distributions to worker-owners (through profit-sharing or dividends).
   • A portion of the surplus revenue may also be allocated to Ubuntu Holdings to support collective-level initiatives, such as training and development programs, research and innovation, or expansion into new markets.
5. Financial governance and transparency:
   • The financial performance and capital allocation decisions of each cooperative are overseen by their respective Boards of Directors, which are elected by the worker-owners.
   • The Board of Directors of Ubuntu Holdings is responsible for overseeing the financial performance and capital allocation decisions at the collective level.
   • Regular financial reporting and transparency are essential to maintain trust and accountability among worker-owners, funders, and other stakeholders.