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Why Zebras Matter

Who would want to be a unicorn, when you could be a zebra? Some people believe it’s time to throw away the mythical idea that unicorns trump zebras. 

Why do zebras matter? Mara Zepeda, coauthor and cofounder of “Zebras: Let’s Get in Formation,” Switchboard and Zebras Unite, stands by her belief in the power of businesses to be beneficial to social systems and their communities.

Switchboard works with colleges, universities, journalism and other membership organizations to help institutions and companies to better listen to and serve their target audience. 

“Our company, [Switchboard], identifies as a zebra because we are working in a space that’s really critical to the social and democratic fabric of our society,” Zepeda explained. “Generally speaking, higher ed could do a lot more to serve students with their needs. Students’ needs are really changing.”

Zepeda used the student loan crisis and higher education institutions closing as examples. Real problems that college students, and even those not in college, could agree are serious issues. 

“The industry has to shift, it has to change if it wants to stay alive. And the best way to change is to reorient — to better serve its students and alumni.  So, [Switchboard] helps institutions to do that. So our metrics aren’t about how much advertisement we sell. It’s about how can institutions better serve and help their members succeed.”

During an interview with The New York Times in 2019, Zepeda said, “the tool of venture capital is so specific to a tiny, tiny fraction of companies. We can’t let ourselves be fooled into thinking that’s the story of the future of American entrepreneurship.”

Zepeda still stands by this, telling Lioness, “we are in the process of having to invent tools for the new economy.” 

Traditionally, commercial bank loans and venture capital are how businesses get funding, but they are difficult for startups. “With a commercial bank loan, you get that loan by having something to collateralize. If you’re a software company, the only collateral you have is your laptop. So, traditional bank loans and commercial lending is problematic. It’s also drastically decreased since the financial crisis. That’s because small community banks have been consolidated by big banks, and so they aren’t lending as much,” Zepeda said. 

“On the other side with venture capital, you have about 2.7% of venture capital going to women founders, and so, basically, if you are not a man, that tool is not really accessible to you.”

This leaves a lot of entrepreneurs stuck in the middle without a great option to get funding — “the capital chasm,” as Zepeda referred to it. She said there’s an opportunity to develop financial products that meet these entrepreneurs’ needs. 

“It means inventing new types of debt instruments, or revenue-based financing, longer-term loans, a combination of debt and equity — it means becoming creative with the capital ecosystem. Zebras Unite is advocating for more creativity and innovation in [the capital ecosystem] so we can get more solutions,” Zepeda said.

For unicorns, they don’t need to think of creative and beneficial ways to gain capital the way zebras do — they’re the type to get the venture capital. In March 2017, Debrah Charatan’s article reported that, as of March 2017, there were 223 unicorn companies. According to TechCrunch this month, that number has grown to 584 unicorns. That’s 584 “private companies with post-money valuations of $1 billion or more.”

While the number of unicorns has more than doubled in the last three years, Zepeda said, “for every one of those unicorns beneath them is a massive opportunity for the ten or hundred companies in those portfolios and funds that didn’t become unicorns.” 

Zepeda says we need to think about how we can invest in those companies to get them the capital they need to be successful as zebra companies, and that is what Zebras Unite is working to do.

According to Zepeda, the focus should not be on aggressive, fast money-makers, but zebras that are primed for long-term success, unlike the ticking-time-bomb unicorn companies. 

She believes the long-term success of zebras comes down to “the values and motivations of the founders.”

“What you see is many of these founders don’t just want to make investors rich. They are motivated for many different reasons. Maybe they want to leave a toxic work environment or solve a social problem that they themselves face. When you have different motivations, especially, from women and people of color and underrepresented founders, their number one goal is not this ‘boom or bust’ mentality,” Zepeda explained.

With zebra founders, “they’re looking for how their company fits into their broader ecosystem, and impacts their local community. Zebra companies think more holistically about the communities in which they live.”

Zebra companies are economically beneficial, especially to their communities. They have the opposite effect of unicorns which are causing big problems in areas like Silicon Valley, because of the ‘boom or bust’ mentality Zepeda referenced. 

“What you’re starting to see is a new generation of companies — the B-corp movement and others — that are actually creating new business organizations that are aligned with their values to advocate for the prosperity and success of the entire community,” Zepeda said.

Backing these companies helps pay it forward to employee satisfaction, more affordable housing within the communities they’re working and access to better schools.

For zebra companies, “the success of the business is tied to the success of the community,” Zepeda said.

Zebras Unite strives to help the zebra company founders come together as a community to help one another build their communities, too.  Zebras Unite does this through culture, capital and community.

Culture comes into play through members doing interviews (like this one), speaking at events and advocating for others to understand the importance of zebras and their benefits beyond just making a profit and providing a service like other businesses. They have the goal of changing social systems to improve their communities.

In terms of capital, Zebras Unite is starting its own co-op in order to financially back other zebra founders. “The Zebra’s cooperative will allow zebra companies to become members and then their success will become mutually beneficial to the success of the other zebra companies. We will have a zebra fund which we will invest in zebras, and so as they gain investment and succeed, those returns will go back into the cooperative. So now what you have is more people sharing in this prosperity of companies succeeding.”

Community is extremely important for Zebras Unite — a community built on their mutual interest in improving their communities. To date, they have approximately 5,000 members in their online community amongst six continents.

Zebras Unite thrives on its diversity and ability to provide a community for those who may not traditionally have one in the business world. And most importantly, a community that they are welcome in and can thrive in. 

Zepeda said, “about 69% of our community identifies as a woman or person of color, so one thing that’s unique about the zebra movement is a lot of these founders just have traditionally been left out of the existing entrepreneurship ecosystem. So they feel very called to this movement because they are able to find their community. The diversity of who we have in our community is really important.”

“We lead with our values,” Zepeda added, clarifying that Zebras Unite didn’t go out seeking a specific demographic for their community. All they sought were founders with the same values and the zebras came.

About the author

Julianne Feher

Julianne Feher is a Creative Writing major at Western New England University. Her two necessities to get her through the day are coffee and remembering everyday is a fresh start with the right mindset. Julianne plans to be a high school English teacher and hopes to pass her love for reading on to as many future generations as possible.

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