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These are real challenges, nice outline of the capital issue. Coops generally have to get money by borrowing rather than equity investment. I'm for increasing

• gruez 6y ago
  >There are also hybrid models possible where workers own some % of the company -- over 50% if you want to consider it worker-controlled -- but investors also own a portion. but why would investors invest in a company that gives them half as much stake (because the other half goes to the workers)?
  • jrochkind1 6y ago
    Why do investors invest in a founder-controlled company, where the founders have more than 50% stake? To make money, I would assume, is why they do it? I'm sure it's a barrier, but it apparently isn't one that rules out all investment, since investors do it with founder-controlled companies, right? There is even entirely non-voting stock, which people invest in. If it were decided through political processes that worker-owned cooperatives were a public good to be encouraged, there could be additional incentive/subsidy through the tax code or other means for investing in minority stakes in them. (As the government subsidizes/incentivizes homeownership or higher ed tuition. Or for that matter, ESOP's for another route to minority employee ownership).
    • gruez 6y ago
      >To make money, I would assume, is why they do it? If the only option were a drivers cooperative, then yes they might go for it (although they're still going to be competing against other forms of investment, eg. other stocks). However that's rarely the case, because there's going to be non-cooperatives which don't have workers taking up 50% of the stake. >since investors do it with founder-controlled companies, right? There is even entirely non-voting stock, which people invest in. They only do that because they think the founders are valuable. I don't see how the same dynamic exists with mostly replaceable drivers.
      • jrochkind1 6y ago
        They can still believe in the leadership of the project. After all, many investors invest without themselves having a majority stake. If you own 3% of a company, the other 97% might be other investors, or might be some other investors and some worker-owners, you still only own 3%. Not everyone thinks worker-owners are any less capable of making good decisions towards the success of the endeavor than investors, although I gather you do. Sometimes worker-owned businesses do well in fact because the worker-owners are willing to put in more energy and sacrifice for their business than typical employees, worker-ownership can be a plus. (Obviously plenty fail too, not saying it's some kind of magic invulnerability). But also investors sometimes invest in worker coops because they want to support a worker-owned business in addition to make money, some kind of values-based investing: https://nextcity.org/daily/entry/worker-cooperatives-are-finding-investors-who-share-their-values https://nextcity.org/daily/entry/worker-cooperatives-are-fin... Look, all I can say is this is an actual thing that happens, there are hybrid ownership worker coops taht also have investors, it literally exists in reality. Here's more info, including targetted at potential investors: https://project-equity.org/about-us/publications/coop-investment/ https://project-equity.org/about-us/publications/coop-invest... As I keep saying, I agree there are reasons some investors rae reluctant to invest, and the government could provide subsidy or incentives to change that calculus somewhat, the same way the government does for all sorts of economic activity that is considered socially desirable. It's true that worker coops have barriers to raising capital, but this really is one way some have done it, despite the challenges, it literally happens in reality, so if you're trying to argue that it doesn't, that's a weird argument.
  • Mauricebranagh 6y ago
    No that model is a worker coop - its how Poptel in the UK was structured.