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>It would be doomed to fail. These business models run on VC funny money. No reason a VC couldn't invest in a co-op. Or if they feel they aren't getting the u

>It would be doomed to fail. These business models run on VC funny money. No reason a VC couldn't invest in a co-op. Or if they feel they aren't getting the unicorn returns they want, then instead of a co-op it could be organized as an employee owned and operated entity. I think that is the future, and the disruption SV needs at this point...stop the madness of centralizing the wealth among founders and investors, and distribute it to the workers.

ericd 7y ago
Why would the investors invest in something where they wouldn’t get a large part of the returns? They’re not investing their own money, they have investors (things like pension funds) that they have to answer to. And honestly, the majority of VC funds don’t do very well, even taking the large stakes they do. It’s a hits driven business, and if you don’t get those one or two breakout successes, you probably don’t make back your fund.
- throwaway_law 7y ago
  >Why would the investors invest in something where they wouldn’t get a large part of the returns? Why would you think the investors would get any less returns if the entity (say uber) was driver owned? They wouldn't everything remains the same, except instead of a concentration of ownership in a small group of founders, that same percentage of ownership would be distributed among a larger group of workers. So the real question is why are investors so adverse to employee owned enterprises and invest in small groups of founders.
  - ericd 7y ago
    >stop the madness of centralizing the wealth among founders and investors, and distribute it to the workers. This seemed to imply that the investors would take less of a stake. Are they adverse to funding employee owned enterprises? I've never looked into it. Maybe they think that companies with dictatorial management are more effective at competing? For the record, having been a founder, I agree that equity tends to be overly concentrated with the founders.
chongli 7y ago
No reason a VC couldn't invest in a co-op. Because it is by definition not a co-op as soon as it takes VC money. A co-op is a business where every worker owns an equal share.
- throwaway_law 7y ago
  VCs could finance these companies and make money on the investment that way without taking ownership. For example, I am certain YC accepts non-profits which have gone on to attain VC investment... and non-profits don't have any ownership.
  - chongli 7y ago
    They could finance these companies in some roundabout way, but then to call them co-ops would be dishonest or even fraudulent, depending on who you ask. Why go to all the trouble? VCs seem to be fine investing in traditional, capitalist companies.

ericd 7y ago

Why would the investors invest in something where they wouldn’t get a large part of the returns? They’re not investing their own money, they have investors (things like pension funds) that they have to answer to. And honestly, the majority of VC funds don’t do very well, even taking the large stakes they do. It’s a hits driven business, and if you don’t get those one or two breakout successes, you probably don’t make back your fund.

throwaway_law 7y ago
>Why would the investors invest in something where they wouldn’t get a large part of the returns? Why would you think the investors would get any less returns if the entity (say uber) was driver owned? They wouldn't everything remains the same, except instead of a concentration of ownership in a small group of founders, that same percentage of ownership would be distributed among a larger group of workers. So the real question is why are investors so adverse to employee owned enterprises and invest in small groups of founders.
- ericd 7y ago
  >stop the madness of centralizing the wealth among founders and investors, and distribute it to the workers. This seemed to imply that the investors would take less of a stake. Are they adverse to funding employee owned enterprises? I've never looked into it. Maybe they think that companies with dictatorial management are more effective at competing? For the record, having been a founder, I agree that equity tends to be overly concentrated with the founders.

chongli 7y ago

No reason a VC couldn't invest in a co-op. Because it is by definition not a co-op as soon as it takes VC money. A co-op is a business where every worker owns an equal share.

throwaway_law 7y ago
VCs could finance these companies and make money on the investment that way without taking ownership. For example, I am certain YC accepts non-profits which have gone on to attain VC investment... and non-profits don't have any ownership.
- chongli 7y ago
  They could finance these companies in some roundabout way, but then to call them co-ops would be dishonest or even fraudulent, depending on who you ask. Why go to all the trouble? VCs seem to be fine investing in traditional, capitalist companies.