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Investment Capital for Worker Cooperatives

While the impact investing field has taken off in recent years and has influenced mainstream banking priorities, worker cooperatives are not yet a viable option for a typical impact investor interested in ‘investing with purpose.’ In these two publications, we address the question: What would it take for an investor to be able to easily target part of their investment portfolio to worker-owned cooperatives, to ‘mainstream’ the practice of investing in worker cooperatives?

THE ORIGINAL
COMMUNITY INVESTMENT

A guide to worker coop
conversion investments

This paper aims to help investors understand worker cooperative investing, especially in the context of worker coop conversions. We first review the basics of worker cooperatives and worker coop conversions including how financial statements are different and how deals are structured. Then, we go into detail about investment options and considerations.

An investor who wants to make a steady return and support the worker cooperative model has a range of options to invest either directly or indirectly in worker-owned cooperatives. We hope this information is helpful to encourage investment in this highly beneficial—and highly underrepresented— business model.

ADDRESSING THE RISK CAPITAL GAP
FOR WORKER COOP CONVERSIONS

Strategies for the field to
increase patient, risk capital

This paper is targeted at the field of worker coop practitioners, investors, lenders and advocates. We first share some of the challenges to placing investments in worker coop conversions from different perspectives: investors, existing loan funds and worker cooperatives themselves. Then, we discuss and share recommendations for each of the five key challenges to increasing patient capital investment:

  • Low and fragmented supply
  • Fragmented demand
  • Unconventional business model with unfamiliar risks, customized underwriting and high transaction costs
  • Constrained returns
  • Need for impact data

View our recorded webinar

Impact Investing in Worker Cooperatives: How to get involved

Date: Tuesday, 4/26
Time: 1pm EST / 10am PST

Worker cooperatives are a highly underrepresented business model that have tremendous positive impacts for employees, businesses and communities.

This webinar is targeted for impact investors and others who want to better understand investment options for targeting impact capital to worker coops. We will provide background about worker cooperatives and the opportunity in worker coop conversions, review worker coop investment structures, and delve into investment options ranging from direct investing, loan and equity fund investing and investment crowdfunding.

Panelists

Just released!

New studies in the SF Bay Area, Twin Cities, Western North Carolina and Detroit, show millions of businesses at risk, pointing to employee ownership as a solution.

Free consultation

for businesses interested in employee ownership.

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