Worker Co-op Formation Fund
A nonprofit venture fund that seeds new companies on one condition: the people who work there own and run them. Not built yet, and still on the table. (Working name.)
A nonprofit venture fund for worker-owned companies. It would give founders the capital to start a business on the condition that the company is owned and run by its workers, permanently, and take a small passive stake (five to ten percent) in return. The stake lets the fund see the books, earn dividends to seed the next company, and care about picking winners. I first designed it in my senior thesis at Denison in 2008.
Most workers have no collateral, so banks will not lend them enough to start or buy a company, and few can afford to bet their savings on one. The harder problem is incentives. Equity is the reward for both the founder and the investor, and the investor usually holds more of the control. Both want to keep as much equity and control as they can, which leaves the workers owning nothing and is why almost nobody starts a worker cooperative. The Credit Union Formation Fund solves the capital problem for new credit unions. This is its older sibling. I have not built it and have not yet solved those incentives, but it is still on the table.