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Comment by kahunamoore | Hacker News Reader

I would turn that statement around, the biggest advantage of coops is that they do not fall into the debt trap. When you borrow money from VCs they own you. Keeping them happy becomes job #1 and your customers job #2.

The day your funding comes through starts a clock that defines your runway. Most startups are too early into a market and run out of money/time before the market develops/matures. Co-ops are one of the most stable forms of enterprise and money earned stays within the ecosystem rather than being funneled off to disinterested investors.

Co-ops adhere to democratic principles so, yes, in the context of most corporations (totalitarian/dictatorships) that notion might seem quite radical. I would argue that the old forms of work and the corporate form we know today is due for some refactoring. Co-ops are a uniquely positioned alternative. See also: "The Second Curve" by Charles Handy.

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> I would argue that the old forms of work and the corporate form we know today is due for some refactoring.

I completely agree.

It does seem that startups sometimes go out and raise money simply because it's the expected thing to do. And with the cost of getting a product to market and a business off the ground so incredibly low these days there is much less of inevitable need for VC than there was, say, in the 90s.

That said, raising capital can be incredibly useful for a company. It can fund initiatives that otherwise simply wouldn't be possible with cash on hand. And traditional lenders might be hesitant to give loans to a very young organization with few assets.

I would imagine there are various creative ways to handle this A co-op could always sell shares to an investor if they decided to not be 100% worker-owned. And a co-op could always decide to seek a traditional exit event at some point if they wanted to (there are plenty of publicly traded coops). Or you could structure some kind of joint venture. I imagine though that the biggest problem would be that most investors wouldn't want to take on the added risk of dealing with an unusual corporate structure if they didn't have to.

Some coops have experimented with this but kept 51% to remain a coop but it didn't work out for poptel.

http://www.andrewbibby.com/socialenterprise/poptel.html

The [ dictatorship => democracy ] imagery is helpful and was part of how we envisioned nilenso as it formed. On a long enough timescale, it also seems to make sense since those forms of governance have worked well for, well, governments -- why not businesses?

I have a read a lot of legal paperwork around co-operative corporate structures available in Canada (where I'm from) which permit external investment or distribution of shares in a variety of configurations. However, I'm not familiar with a single co-operative that actually operates this way.

Having additional motivation for avoiding VC has been helpful at nilenso because it often feels like the streets might as well be lined with suits trying to throw money at us. We have considered taking VC funding if necessary, but probably only the expansion of a business which isn't purely software: hardware, logistics, manufacturing and distribution of physical assets... we've repeatedly acknowledged that doing any of these might require more capital than we can commit by bootstrapping.

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