Understanding the Basics
To understand the concept behind a Membership-based Capital Cooperative™, one first needs to understand the most basic building blocks of our innovative approach. When we set out on this journey, we wanted to create something special ... where the people managing the Cooperative shared the same goals and objectives as the Members contributing to it.
What is a Cooperative?
A “cooperative” is an autonomous association of people united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically controlled business. In other words, it is a jointly-owned business engaged in business for the mutual benefit of its members.
“Cooperation” dates back as far as the start of civilization when human beings began organizing for mutual benefit. Primitive tribes learned that organizing into a cooperative structure, distributing work, sharing resources, and sharing risks among themselves led to a better life for all. Similarly, farmers, workers, retailers, consumers, and banks have all formed traditional cooperative structures in modern times -- designed to share work, resources, and responsibilities for the betterment of the cooperative’s membership. Many of these traditional cooperatives have proven to be robust business structures and have stood the test of time. Historically, cooperatives tend to have a longer life than other types of enterprises because the members have a vested interest in its continued operation for the benefit of all parties involved.
By nature, cooperatives are built on a very high standard of operating principles and ethical values because they are people-focused and basically formed for just one reason -- the common good.
A Cooperative aligns the objectives, outcomes, and risks of all members through standardized rules, Policies, and compliance with Transparency to all members.
These common fundamental principles include open membership, democratic control, economic participation, autonomy and independence, information sharing, cooperation, and concern for the community. As for shared personal values, a cooperative embraces equality, honesty, transparency, integrity, fairness, social responsibility, and community affairs. Built on these principles and values, cooperative-based businesses typically result in a more efficient and economically resilient organization.
With this in mind, we built our Capital Cooperative™ on a foundation of many of these same principles and values. When an organization and its membership are aligned to achieve common goals, good things are bound to happen!
What is a Capital Cooperative™?
In a capital cooperative, the cooperative's objectives are directly aligned with each of its member's objectives.
Unlike a traditional cooperative in which each member owns a small piece of the cooperative, in our Capital Cooperative™, the Cooperative owns a little piece of each of its Members. Simply put, the Capital Cooperative™ is a membership-based business focused on helping its "Affiliate Members" with capital and select services in support of approved projects or enterprises. Like a traditional cooperative-based enterprise, the Capital Cooperative™ is founded upon a high standard of operating principles and values that are applied to avail the proprietary tools and structures designed by the Cooperative for the common good of its Members within the context of a true private partnership. The Capital Cooperative™ foregoes almost all short-term economic benefits in favor of participating in the long-term success of each enterprise that has enrolled as a Member.
Through enrollment, each Member becomes a legal affiliate of the Capital Cooperative™, which enables the Cooperative to become the “tie that binds” among all Affiliate Members such that economies of scale can be achieved among the broader Cooperative membership. This means that capital can be allocated by the Capital Cooperative™ to assist its Members at perhaps better rates or under more attractive terms than an enrolled company may be able to garner in the open marketplace as a stand-alone venture.
The Capital Cooperative™ is positioned to apply its capital strategies to provide funding support to almost any properly underwritten and credit-supported projects or enterprises owned and undertaken by its Affiliate Members. By using standardized protocols and processes, the Capital Cooperative™ serves as an active partner of each of its Affiliate Members as far as funding support is concerned. This provides access to capital within a structure that is neither an equity investment nor a traditional loan. Instead, funding is contributed to an Affiliate Member by the Capital Cooperative™ pursuant to a private capital access agreement that reflects a long-term equity-based partnership perspective with each of its Members. Ultimately, this results in access to more patient capital for Affiliate Members since the Cooperative’s business model looks toward long-term collective success instead of short-term economic gain.