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Worker-owned co-operatives are some of the most resilient businesses in the startup world, so why don’t investors back them?
Well, I guess because angel and venture capital investors rather care about about growth and rate of return. :-) Resilience is very important if one does not plan to sell the shares - but this kind of investment is very different from the one that most angel and venture capital investors are interested in.
The kind of business model where one is interested in long-term investments are more of the kind of life insurance companies and pension funds. But these groups are very conservative in their investments (i.e. they will avoid investing in unproven business models, and rather invest in very balanced, conservative stock portfolios and government bonds).
> Worker-owned co-operatives are some of the most resilient businesses in the startup world, so why don’t investors back them?
> 76% of them survive their first five years, compared with 50% of other startups.
> “It functions a lot like a debt,” explains Loomio cofounder Richard Bartlett. “The investor has bought the share, then it's redeemable in the sense that the company will eventually buy it back off him.
Investors do back this, via debt financing. But the returns are limited.
You know that tech investors actually buy ownership in companies, right? The reason worker-owned co-operatives work well is _because_ they don't have tech investors making stupid demands for good quarterly reports.
I think successful open source projects should turn into contributor owned cooperatives. There’s no reason why companies such as amazon, google, microsoft, etc shouldnt be made to pay for the open source code they use and contributors should be rewarded for their effort.
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[ 3.1 ms ] story [ 17.5 ms ] thread> Worker-owned co-operatives are some of the most resilient businesses in the startup world, so why don’t investors back them?
Well, I guess because angel and venture capital investors rather care about about growth and rate of return. :-) Resilience is very important if one does not plan to sell the shares - but this kind of investment is very different from the one that most angel and venture capital investors are interested in.
The kind of business model where one is interested in long-term investments are more of the kind of life insurance companies and pension funds. But these groups are very conservative in their investments (i.e. they will avoid investing in unproven business models, and rather invest in very balanced, conservative stock portfolios and government bonds).
> 76% of them survive their first five years, compared with 50% of other startups.
> “It functions a lot like a debt,” explains Loomio cofounder Richard Bartlett. “The investor has bought the share, then it's redeemable in the sense that the company will eventually buy it back off him.
Investors do back this, via debt financing. But the returns are limited.
You know that tech investors actually buy ownership in companies, right? The reason worker-owned co-operatives work well is _because_ they don't have tech investors making stupid demands for good quarterly reports.