Helping Simprints fight world poverty through its innovative biometric software and hardware
Simprints is a pioneering tech company committed to improving the lives of the world’s poorest people. They’ve developed a low-cost, rugged fingerprint scanner designed to provide accurate identification even in challenging third world conditions. The scanner links people to their digital records via web or Android applications in real time, ensuring the right healthcare, finance and aid services can be delivered to the right people, quickly.
Simprints was originally incorporated as a straightforward limited company, but this didn’t entirely meet their needs. They wanted to be able to give their profits back to society, but without the complications and restrictions of becoming a charity or community interest company. At the same time, they didn’t want to discourage seed investors that could fuel the company’s future growth.
Simprints approached us with their dilemma, and we responded with an innovative, hybrid legal structure that gives them the best of both worlds.
We recommended they remain a company limited by shares, but include a 100% ‘asset lock’ in their articles of association. The lock prevents dividends being paid or equity sold outside of impact investing, requiring all profits to be reinvested back into the business. It also stipulates their assets go to a charity or other non profit body if the company ever winds up.
This allows Simprints to operate on a not for profit basis and be eligible for grant funding. However, it does not close off the opportunity for future private investment, as it’s within the shareholders’ powers to remove the asset lock if and when this is in the company’s best interests. Such a decision cannot be take lightly and will require the approval of at least 75% of the company’s shareholders. Yet it means means Simprints remains attractive to investors by having the potential to provide financial returns.
Making great things happen
We created a future-proofed legal structure for Simprints that satisfies their philanthropic outlook whilst also giving them commercial flexibility. It’s allowed Simprints to benefit from business grants, which have raised $1.2 million in the company’s first year alone. Having tested their scanners with 125,000 fingerprints in six countries across three continents, they have proved the concept and progressed to commercial manufacturing.
Simprints’ contribution to tackling poverty has been acknowledged by the Schwab Foundation, which celebrates social entrepreneurs who harness market forces and business principles to solve social problems. Schwab Foundation, a sister organisation of the World Economic Forum, recently presented Simprints with a 2017 Social Entrepreneur of the Year Award. The award recognises the value of Simprints’ open-source fingerprint system, which will help establish identities and secure support for the 1.5 billion people in the world who don’t officially exist.
Simprints’ highly effective scanners will have a positive impact on maternal health, immunisation, education, microfinance, aid distribution and data collection, empowering NGOs, governments and business to help lift people out of poverty across the developing world. Meanwhile our innovative suggestion for their legal structure has won the attention of other groups seeking an alternative, practical route to running a business-based social venture.
What the client said
“Finding the right legal structure was difficult for us. Impact is at the heart of everything we do, but being a charity would have reduced our fundraising options considerably. Taylor Vinters suggested we should be a limited shares company with an asset lock, and it has proved to be an innovative way and successful way to secure funds now with the option of attracting investors in the future.”
Simprints is a non-profit tech company that has drawn on talent and ideas from the University of Cambridge, to create a biometric fingerprint scanner that seeks to break the identification bottleneck – one of the major obstacles to delivering support accurately and efficiently in third world countries. Simprints’ low-cost, rugged fingerprint scanner and open-source Android application instantly link individuals to their health records. Using this technology, a community health worker can swipe a mother or child’s fingerprint and access their records in real-time on their phone, including next steps in their care such as vaccinations or medication. For more information, go to the Simprints website.