As for what a co-op is the short gist is that it's an employee owned business, usually shared between employees. Most of it's history here in the states is associated with hippies and small town municipalities but in other places there are even universities that specialize in it like Mondragon University in Spain.
You've hit on the largest challenge of starting a co-op, that is getting the initial investment as it is quite difficult to get those loans and there are not as many investors pursuing that route.
There are also consumer cooperatives, and hybrid models.
Also, some cooperatives are cooperatives of other businesses (agricultural coops are often this, and sometimes sports leagues or similar), but those are in some ways a very different thing.
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[ 3.4 ms ] story [ 24.8 ms ] threadHow does a business get off the ground without investment? Other than taking out a loan, credit card debt, or personal savings
You've hit on the largest challenge of starting a co-op, that is getting the initial investment as it is quite difficult to get those loans and there are not as many investors pursuing that route.
This article from a couple of weeks ago hits on how it's actually getting harder for them. https://www.propublica.org/article/the-government-is-here-to...
Also, some cooperatives are cooperatives of other businesses (agricultural coops are often this, and sometimes sports leagues or similar), but those are in some ways a very different thing.
You’re correct that financing is harder compared to VC funding, and likely involves personal or bank loans.