A very basic overview of alternative/less common business structures. Specifically focusing on employee owned models and cooperatives. This was a slideshow I put together for the Reinventing Capitalism talk on November 8th 2012.

1. Alternative Business Structures
A brief overview...

2. The Basic Overview

Employee Owned/Profit Sharing Models
− Corporations or LLCs with internal structure to
create employee ownership

3. The Basic Overview

Employee Owned/Profit Sharing Models
− Corporations or LLCs with internal structure to
create employee ownership

Cooperatives

4. The Basic Overview

Employee Owned/Profit Sharing Models
− Corporations or LLCs with internal structure to
create employee ownership

Cooperatives

The Benefit Corporation (the B-Corp)

5. The B-Corp

6. The B-Corp

Relatively new legal structure

7. The B-Corp

Relatively new legal structure

Has a legal obligation to meet other
criteria aside from turning a profit.

8. The B-Corp

Relatively new legal structure

Has a legal obligation to meet other
criteria aside from turning a profit.
− Financial

9. The B-Corp

Relatively new legal structure

Has a legal obligation to meet other
criteria aside from turning a profit.
− Financial
− Environmental

10. The B-Corp

Relatively new legal structure

Has a legal obligation to meet other
criteria aside from turning a profit.
− Financial
− Environmental
− Social

11. The B-Corp

Relatively new legal structure

Has a legal obligation to meet other
criteria aside from turning a profit.
− Financial
− Environmental
− Social
THE TRIPLE BOTTOM LINE

12. The B-Corp

650+ B-Corps currently

13. The B-Corp

Like:

14. The B-Corp

For more info:
− www.bcorporation.net

15. The ESOP

16. The ESOP

Employee Stock Ownership Plan

17. The ESOP

Employee Stock Ownership Plan

Shares are given to employees and are held in trust
until the employee retires or leaves the company

18. The ESOP

Employee Stock Ownership Plan

Shares are given to employees and are held in trust
until the employee retires or leaves the company

Most ESOPs are registered as S-Corps

19. The ESOP
Studies show on average, employees have
considerably more in retirement assets
than comparable employees in non-ESOP
firms. In some cases, about three times
as great. National data from Joseph Blasi
and Douglas Kruse at Rutgers shows that
ESOP companies are more successful
than comparable firms, so wages in
ESOP firms were also 5 per cent to 12 per
cent higher.

20. Other “Employee Owned” Models

Direct Purchase Plans
− Employees may purchase stock

21. Other “Employee Owned” Models

Direct Purchase Plans
− Employees may purchase stock

Stock Options
− Defined number & prices

22. Other “Employee Owned” Models

Direct Purchase Plans
− Employees may purchase stock

Stock Options
− Defined number & prices

Restricted Stock
− Having met certain requirements

23. Other “Employee Owned” Models

Direct Purchase Plans
− Employees may purchase stock

Stock Options
− Defined number & prices

Restricted Stock
− Having met certain requirements

Phantom Stock
− Essentially just profit sharing

24. Other “Employee Owned” Models

Direct Purchase Plans
− Employees may purchase stock

Stock Options
− Defined number & prices

Restricted Stock
− Having met certain requirements

Not really
Phantom Stock
employee
owned...
− Essentially just profit sharing

25. Where to learn more

National Center for Employee Ownership
− www.nceo.org

26. Cooperatives - Overview
•
Voluntary and open membership

27. Cooperatives - Overview
•
Voluntary and open membership
•
Democratic member control (often One
Member – One Vote)

28. Cooperatives - Overview
•
Voluntary and open membership
•
Democratic member control (often One
Member – One Vote)
•
Economic participation by members

29. Cooperatives - Overview
•
Voluntary and open membership
•
Democratic member control (often One
Member – One Vote)
•
Economic participation by members
•
Autonomy and independence

30. Cooperatives - Overview
•
Voluntary and open membership
•
Democratic member control (often One
Member – One Vote)
•
Economic participation by members
•
Autonomy and independence
•
Education, training and information

31. Cooperatives - Overview
•
Voluntary and open membership
•
Democratic member control (often One
Member – One Vote)
•
Economic participation by members
•
Autonomy and independence
•
Education, training and information
•
Cooperation among cooperatives

32. Cooperatives - Overview
•
Voluntary and open membership
•
Democratic member control (often One
Member – One Vote)
•
Economic participation by members
•
Autonomy and independence
•
Education, training and information
•
Cooperation among cooperatives
•
Concern for community

33. Cooperatives - Overview
More than 29,000 US
cooperatives that
operate at some 73,000
places of business
throughout the United
States. Cooperatives
account for nearly $654
billion in revenue, over
two million jobs, $75
billion in wages.

34. Basic Types of Coops

Consumer Coop

35. Basic Types of Coops

Consumer Coop
− Business is owned & operated
by the customers

36. Basic Types of Coops

Consumer Coop
− Business is owned & operated
by the customers
− Very commonly grocery stores
(food-coops), but also extends
to health care, insurance,
housing, utilities and personal
finance (credit unions)

37. Basic Types of Coops

Worker Coop

38. Basic Types of Coops

Worker Coop
− Owned and democratically
controlled by its "worker-
owners"

39. Basic Types of Coops

Worker Coop
− Owned and democratically
controlled by its "worker-
owners"
− Many hybrids and adaptations
world-wide

40. Basic Types of Coops

Retailer Coop

41. Basic Types of Coops

Retailer Coop
− Employs economies of scale to
receive discounts from
manufacturers and to pool
marketing.

42. Basic Types of Coops

Retailer Coop
− Employs economies of scale to
receive discounts from
manufacturers and to pool
marketing.
− Members are usually businesses

43. Basic Types of Coops

Retailer Coop
− Employs economies of scale to
receive discounts from
manufacturers and to pool
marketing.
− Members are usually businesses
− Best Western is technically a
retailers' cooperative whose
members are hotel operators.

44. Basic Types of Coops

Business & Employment Coop

45. Basic Types of Coops

Business & Employment Coop
− to incubate start-ups from idea
to maturation

46. Basic Types of Coops

Business & Employment Coop
− to incubate start-ups from idea
to maturation
− Three phases

47. Basic Types of Coops

Business & Employment Coop
− to incubate start-ups from idea
to maturation
− Three phases

Supported

48. Basic Types of Coops

Business & Employment Coop
− to incubate start-ups from idea
to maturation
− Three phases

Supported

Salaried

49. Basic Types of Coops

Business & Employment Coop
− to incubate start-ups from idea
to maturation
− Three phases

Supported

Salaried

Member

50. Basic Types of Coops

New Generation Coop

51. Basic Types of Coops

New Generation Coop
− Hybridization of cooperative
and LLC

52. Basic Types of Coops

New Generation Coop
− Hybridization of cooperative
and LLC
− Ideal for capital intensive
business

53. Basic Types of Coops

New Generation Coop
− Hybridization of cooperative
and LLC
− Ideal for capital intensive
business
− Common purpose is to add
value to primary products
(ethanol from corn, pasta from
durum wheat, or gourmet cheese
from goat’s milk)

54. Familiar Cooperatives

Housing & Building Cooperative

55. Familiar Cooperatives

Housing & Building Cooperative
− Residents either own shares
reflecting their equity in the
cooperative's real estate, or have
membership and occupancy
rights in a not-for-profit
cooperative.

56. Familiar Cooperatives

Housing & Building Cooperative
− Residents either own shares
reflecting their equity in the
cooperative's real estate, or have
membership and occupancy
rights in a not-for-profit
cooperative.
− Co-op City in New York houses
55,000 people and is the largest
in the world

57. Familiar Cooperatives

Utility Cooperative

58. Familiar Cooperatives

Utility Cooperative
− Type of consumer cooperative

59. Familiar Cooperatives

Utility Cooperative
− Type of consumer cooperative
− Delivers utilities (i.e. electricity,
water, telecommunications)

60. Familiar Cooperatives

Utility Cooperative
− Type of consumer cooperative
− Delivers utilities (i.e. electricity,
water, telecommunications)
− Profits reinvested to
infrastructure or distributed to
members

61. Familiar Cooperatives

Agricultural Cooperative

62. Familiar Cooperatives

Agricultural Cooperative
− Agricultural Service
Cooperatives

63. Familiar Cooperatives

Agricultural Cooperative
− Agricultural Service
Cooperatives

Provide various services to
their individual farming
members

64. Familiar Cooperatives

Agricultural Cooperative
− Agricultural Service
Cooperatives

Provide various services to
their individual farming
members
− Agricultural Production
Cooperatives

65. Familiar Cooperatives

Agricultural Cooperative
− Agricultural Service
Cooperatives

Provide various services to
their individual farming
members
− Agricultural Production
Cooperatives

Resources such as land or
machinery are pooled and
members farm jointly

66. Familiar Cooperatives

Credit Unions and Cooperative
Banking

67. Familiar Cooperatives

Credit Unions and Cooperative
Banking
− 7,950 active status federally
insured credit unions

68. Familiar Cooperatives

Credit Unions and Cooperative
Banking
− 7,950 active status federally
insured credit unions
− 90 million members

69. Familiar Cooperatives

Credit Unions and Cooperative
Banking
− 7,950 active status federally
insured credit unions
− 90 million members
− $679 billion on deposit

70. Familiar Cooperatives

Cooperative Federations

71. Familiar Cooperatives

Cooperative Federations
− A Co-op of Co-ops so to speak

72. Familiar Cooperatives

Cooperative Federations
− A Co-op of Co-ops so to speak
− Example: Mondragon
Corporation of Spain

73. Familiar Cooperatives

Cooperative Federations
− A Co-op of Co-ops so to speak
− Example: Mondragon
Corporation of Spain

256 companies in four areas of
activity: Finance, Industry,
Retail and Knowledge

74. Familiar Cooperatives

Cooperative Federations
− A Co-op of Co-ops so to speak
− Example: Mondragon
Corporation of Spain

256 companies in four areas of
activity: Finance, Industry,
Retail and Knowledge

14.8 billion euro in 2011

75. Where to learn more?

National Cooperative Business
Association
− www.ncba.coop

United States Federation of
Worker Cooperatives
− www.uswoker.coop

76. Some possible discussion points

How can we implement any of these structures into our
community?

What are the downsides or obstacles? Can we overcome them?

What kind of cooperatives can be formed to meet a need in our
community? Insurance cooperative? Utility cooperative?

How can we transition our current businesses into more
democratized ones? Is it cost prohibitive in legal fees?

How can we keep this discussion going and help bring these
topics into common knowledge?

What role can the Link play in the community to help
entrepreneurs build these types of businesses?