A co-op is basically the default corporation. As in, everyone shares the profits and liabilities equally. This means that if you're making 1 million a year in

A co-op is basically the default corporation. As in, everyone shares the profits and liabilities equally. This means that if you're making 1 million a year in profit, and you have 10 employees, everyone gets 100,000. But it also means that if you have to pay 1 million a year as interest service payments on your bank loan, and your profit is 2 million, you still only make 100,000 per person. To address your point, the salary is set by every current employee based upon the financial condition and strategy of the company in real time. If sales are down for a quarter, salaries will go down. If the company is saving for a big investment, salaries will be lower. It all depends on how the owner-employees decide to allocate the funds. As such, you wouldn't so much be an "employee" looking for a competitive market salary, as the 25th co-founder signing up for whatever the current compensation/investment package the present owner-employees have decided upon within the financial strategy of the company. Basically, expenses and costs are shared equally across the company. As in, every single worker is a co-founder. This is an ideal model and I'm surprised it hasn't taken off more in tech. We are rapidly approaching the point where talent and capital are the two fundamental bottlenecks to innovation, profits and progress. Offering Engineer #1 one percent compared to the co-founder's 30% seems absurd in this climate. The engineer will just go and co-found his own company, and charge for consulting services. The co-op is the natural end state of a capitalist society where the only means of progress is through hard innovation, research and optimization. This is the only solution when there is no more easy sweat-shop exploitable work which prints money. Personally, this future can't happen fast enough. Most talented people I know are fed up with the tyrannical power structure of startups and corporations in general.