Coralus provides interest-free loans to social entrepreneurs through a democratic process


About seven years ago, serial social entrepreneur Vicki Saunders observed the economy around her and found it broken — a system that benefited a small number of investors while endangering the climate — and our lives — and causing serious inequality. She would help build a better way, not fiddling with the edges. “If we don’t do things differently, there will be no more markets to invest in,” she says.

So Saunders launched a Toronto-based platform that she first called SheEO and focused on what she calls “an alternative economy” for women and non-binary individuals to provide interest-free, five-year loans to women-run social enterprises. Group members vote on which companies they finance. “We help fund female entrepreneurs with companies that drive change and address major global challenges,” says Saunders. About 45% of the more than 120 ventures it has funded to date have been black, indigenous and women of color companies, totaling about $7 million in loans from more than 7,000 individuals. About 60 companies are expected to be funded this year.

Recently, in the midst of a rebranding, Saunders changed its name to: coral to emphasize the collective character of the model. And she’s stepping up her efforts to introduce it to other communities.

Building new systems

Saunders’ approach is based on the idea that there is an urgent need for a fundamental overhaul of the way we invest in and build businesses. “From my experience, I don’t think you can incrementally change your way out of this,” she says. “You have to build new systems.”

But the revamped model needed to not only deploy capital, but also support ideas that, Saunders says, “have solutions we need to survive, as opposed to more extractive companies.” Marginalized groups receive a small share of the capital for a reason, she argues, because the system was designed by a certain group of people with a certain set of values, perpetuating and exacerbating global inequality, as well as the conditions that cause climate change. That had to change. “The question was, how do we disrupt power,” Saunders says.

The community decides

What she created was a system through which members, called activators, pay a subscription fee of $92 per month. That capital is pooled and members vote online once a year for which companies receive financing. “The community determines where the capital goes,” she says. Once the zero interest loans are repaid — Saunders says there’s a 95% repayment rate — the money goes back into the pool, so it keeps rotating.

Entrepreneurs sign up by completing an application of 10 questions online. Once members have selected the companies to invest in, a financial expertise subsection works with the startups to understand how much capital they need and can take on. The average loan is $100,000. Funded companies have average “three-digit” revenue growth, according to Saunders.

Saunders cites Better Packaging, which was funded in 2018, as a prime example of the type of business they are looking for. The circular economy company makes compostable courier packaging made from plastic waste collected by women in impoverished communities from polluted rivers and waterways. So as the business grows, so does its ability to clean up pollution.

Of course the money is important, but also the advice, networking and support that entrepreneurs receive. Saunders points to Twenty One Toys. The Winnipeg company makes an “empathy toy” that anyone from schoolchildren to business colleagues who works in teams of two can use to build connections and communication skills. The founder recently became acquainted with a senior executive at a bank through a Coralus member. That led to a six-figure contract to train employees on how to use the toy.

Saunders started with 500 women in Canada. Now Coralus is in four additional countries – the US, New Zealand, Australia and the UK – and a total of 7,000 women and non-binary women have contributed money.

Share with other communities

About a year ago, Saunders was approached by Dark Matter, an alternative business consultancy, who suggested they work together to introduce the model in other areas. At the same time, she began working with a New Zealand organization that specializes in designing decentralized decision-making systems within communities. Now she is starting an effort to share her experience with other groups and investors.

Still, Saunders isn’t suggesting that everyone is adopting the Coralus approach. “We’re a small example of a different way of doing things,” she says. “We’re going to share what we’ve developed to help people on the margins.”

Applications are open to the next cohort in Canada, the US and the UK until October 16.


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