Co-op News (August 2019)
What is co-operative culture - and why does it matter? This issue looks at how co-op values intersect with the values in organisations, across movements and between countries. Plus 100 years of the Channel Islands Co-operative – and how the new Coop Exchange app is tackling the capital conundrum.
What is co-operative culture - and why does it matter? This issue looks at how co-op values intersect with the values in organisations, across movements and between countries. Plus 100 years of the Channel Islands Co-operative – and how the new Coop Exchange app is tackling the capital conundrum.
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COOP<br />
EXCHANGE:<br />
THE FUTURE OF CO-OPERATIVE GROWTH?<br />
A stock exchange is<br />
a place where the public<br />
can buy and sell securities,<br />
such as shares of stock,<br />
bonds and other financial<br />
instruments. What if there<br />
was such an exchange<br />
specifically for co-<strong>op</strong>eratives?<br />
This was a question Stephen Gill<br />
began to think about last year: how can you<br />
grow the number of co-<strong>op</strong>s, while at the same<br />
time putting the ability to generate wealth into<br />
the hands of those who need it most?<br />
The solution? <strong>Co</strong><strong>op</strong> Exchange, a mobile app that<br />
allows anyone in the world to invest in co-<strong>op</strong>s.<br />
A CO-OPERATIVE BACKGROUND<br />
The team behind <strong>Co</strong><strong>op</strong> Exchange know co-<strong>op</strong>s.<br />
Stephen Gill, CEO and CTO, started out at Scotmid<br />
<strong>Co</strong>-<strong>op</strong>erative, and has been running a successful<br />
software business for almost 20 years. VME is in<br />
the process of converting to a multistakeholder<br />
co-<strong>op</strong>erative. Its chair is Ben Reid, who was the<br />
CEO of Midcounties <strong>Co</strong>-<strong>op</strong> for over 10 years,<br />
and now sits on the board of the International<br />
<strong>Co</strong><strong>op</strong>erative Alliance (ICA).<br />
<strong>Co</strong><strong>op</strong> Exchange seeks to solve two problems that<br />
many co-<strong>op</strong>eratives face, says Stephen.<br />
“Firstly, it’s hard for small co-<strong>op</strong>s to <strong>op</strong>erate on<br />
a loss while devel<strong>op</strong>ing innovations. Uber lost<br />
$891m in 2018. It can do this by covering the losses<br />
with venture capital investment. It’s harder for a<br />
worker co-<strong>op</strong> of taxi drivers to do the same: because<br />
everyone owns one share, equity investment to<br />
cover the losses is trickier.<br />
“Secondly, the withdrawable share capital<br />
doesn't appreciate, which can make founders who<br />
put a lot of initial effort into a company reluctant to<br />
ad<strong>op</strong>t the co-<strong>op</strong> model, as it makes repaying sweat<br />
equity harder.”<br />
A CO-OPERATIVE FUTURE<br />
Stephen believes the solution to both of these<br />
problems is to enable co-<strong>op</strong>eratives to issue a new<br />
type of share: investor shares. These would give a<br />
dividend of the profits, but no voting rights. The<br />
members have full and democratic ownership, but<br />
they can accept investment from anyone across the<br />
world and reward the investors.<br />
The idea for this comes from the FairShares<br />
model, espoused by Rory Ridley-Duff at Sheffield<br />
Hallam University. FairShares is a philos<strong>op</strong>hy for<br />
creating and sustaining networks of solidarity<br />
enterprises that share power and wealth among<br />
stakeholders. It integrates founders, producers,<br />
employees, customers, service users and investors<br />
– and it was this integration that inspired Stephen.<br />
“Investor shares would make it easier for driverowned<br />
co-<strong>op</strong> alternatives to Uber, for example,<br />
to <strong>op</strong>erate on a loss while they grow, as they can<br />
44 | AUGUST <strong>2019</strong>