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Financing is a big barricade for creating a worker owned enterprise in the US. Some countries, like Italy, have programs for workers who are laid off. If ten w

by yesbut 3y ago

Financing is a big barricade for creating a worker owned enterprise in the US. Some countries, like Italy, have programs for workers who are laid off. If ten workers that were laid off at the same time agree then the state will give them all of their unemployment wages in a lump sum to start a worker owned company together. Some countries will give workers the Right to First Refusal if their employer decides thatvthey want to close the place of employment or sale it. And the state will provide low interest loans to the workers so that they can buy the company. There are lots of solutions to the financing issue, but we need the states and federal government to be more supportive of the practical realities of non-wealthy workers starting worker owned enterprises and implement policies that create a level playing field. Banks in the US currently frown on this type of lending.

bruce511 3y ago
>> Financing is a big barricade for creating a worker owned enterprise in the US. I'd argue that even allowing for the VC approach, financing is a big barricade for creating any business. >> Banks in the US currently frown on this type of lending. Given that 90% oc businesses will fail in the first 5 years, its not surprising that lending money to a new business is considered, well, risky. But both these points return us to the same starting point - which is the value of providing capital, and the value of taking risk. Since an investor has a choice, we attract these investors by making them "owners", with the promise of future profit. A government funded model, which provides "collective capital" for no equity sounds like a good plan, that can work well when applied to the right people. Unfortunately it's likely that 90% of the money will be spent for no permanent job return, and that seems like it will become an issue once it spans multiple election periods. Most successful small businesses are started with little capital, but a fair amount of time. I was fortunate that my wife's salary supported me in the years it took for mine to make money.
- yesbut 3y ago
  We should have more public banks like North Dakota does and which are found in many countries. There is clearly a vested interest in the US by the power centers to keeping public banks from spreading.

by yesbut 3y ago

bruce511 3y ago

>> Financing is a big barricade for creating a worker owned enterprise in the US. I'd argue that even allowing for the VC approach, financing is a big barricade for creating any business. >> Banks in the US currently frown on this type of lending. Given that 90% oc businesses will fail in the first 5 years, its not surprising that lending money to a new business is considered, well, risky. But both these points return us to the same starting point - which is the value of providing capital, and the value of taking risk. Since an investor has a choice, we attract these investors by making them "owners", with the promise of future profit. A government funded model, which provides "collective capital" for no equity sounds like a good plan, that can work well when applied to the right people. Unfortunately it's likely that 90% of the money will be spent for no permanent job return, and that seems like it will become an issue once it spans multiple election periods. Most successful small businesses are started with little capital, but a fair amount of time. I was fortunate that my wife's salary supported me in the years it took for mine to make money.

yesbut 3y ago
We should have more public banks like North Dakota does and which are found in many countries. There is clearly a vested interest in the US by the power centers to keeping public banks from spreading.