Co-ops Started With Little To No Money

Based on some of the questions that came up at this month's co-op makers meet-up, here are some stories off-the-top-of-my-head on co-ops that were started with little to no money.

Do you have different ideas or strategies for starting a co-op on the cheap? Share your thoughts in the comments!

Transcript

Hayley Steele: All right. So, since Thursday's meeting, I've had some folks reach out to me to ask for some examples of how can you how can you start a co-op on a budget. So, I'm just going to make this really quick. What is it? Too long, don't read video. You know, a video that's just like a bunch of extra stuff if you're worried about the cost. And I'm hoping that we can eventually have someone who specializes in co-op financing come and give us a real presentation. But these are just some, like off the top of my head examples to help you kind of visualize what it might look like to start a co-op on the cheap.

So, some quick things, and I'm going to go through some examples actually for everything on this list. Co-op workplaces: you can soft launch a co-op workplace as a pop up business while building community support. So you don't have to actually get a building together, you know, there are ways to do it. So you don't need to be renting a big expensive building downtown in the beginning.

And many co-ops also use crowdfunding or even grants to get off the ground. And there's different kinds of funding available, so you can kind of think about, what your  business model looks like and and how you might approach bringing in outside funds, if that's the route that you want to or need to take. And I should say, as you can see, pretty much most people under 40 at this point are going to need a level of financial help, and that's that's okay. That's just kind of part of where the economy is for our generation.

So, another approach is converting an existing business, a legacy business. So we'll talk about that real quick. So, sometimes businesses will actually sell. You know, business owners will sell stock, or sell the full business to their workers, and you'll get a co-op conversion out of that. Okay, and so there are other sources of funding.

Housing co-ops: you could start with a cooperatively managed rental, and I've actually done that. So I'll talk about that real quick. Or you could try doing something fancy, and like setting up a community loan, if you had this vision for what you want to create.

So, let's get into it. I'm going to talk real quick about the Alchemy Collective, a worker co-op cafe established ten years ago in the city of Oakland, California. You know what, I'm dried up on them because they were my neighbors, this all happened about two blocks away from where I lived. And this co-op was actually part of what got me excited about co-op businesses and worker co-ops. And I was also living in a housing co-op at the time. So, you know, there was a lot of neat interaction between the housing co-op where I lived and this worker co-op that was getting off the ground. And yet they got off the ground with nothing. And they're a testament to the fact that you can do this.

So, they started as a pour-over table at the Oakland Farmers Market, and I should say they're not the only co-op to have started in really simple ways. So literally they just had this pour over cup. They'd set up a card table at the farmer's market, like two people there, and they'd make your coffee and they tell you about the vision that they had to start a worker-owned cooperative coffee house, and they got people excited, and had kind of a cool logo that they put on the cups. So I think I've got a photo of that in here. But eventually they saved up enough materials to get a very fancy table. Two of the founding members working on it right there, and it became something of a pop up.

So they ended up getting a spot in the parking lot of a local business, a local cooperative business that supported their vision. You know, so often co-ops will allow unused space in their co-op to to be used by a new co-op that's starting up. And so Biofuel Oasis was a co-op greenhouse that also sold biofuel, and plants and things in South Berkeley, or North Oakland. One of those places. They share a border, so -- but a Biofuel Oasis let the alchemy collective just kind of set up as a pop up. And there was this period for about a year where Alchemy Collective would just show up with their table at different places. And it was kind of like this big, exciting thing, like people would be texting each other about it, like, "oh, Alchemy showed up. Let's go get coffee at this fun pop-up business." And there's their cool logo, it's kind of blurry. They had that from the beginning. So they had pretty much they just had a cool logo, and a card table, and a pour-over thingy in the beginning. But eventually they did two crowdfunding campaigns and they raised $10,000 in each of those campaigns. And I think it really goes to show, you know, how community members will get excited about a co-op, about especially a worker co-op and want to support it.

And their commitment to folks did a great job of promoting the worker co-op model and getting people excited. And check out that fundraising video here. It was made ten years ago. So, it's a little you know -- like I think we have better technology even than they used at the time to make videos like this. But yeah, they made a really good Kickstarter fundraising video that has Star Wars references, and got people especially excited. They really drew upon their their interests, you know, to to get people excited in their project. So check out check out their fundraising video, see what they did. You know, this video, they they used to raise $10,000 and that allowed them to move in to their own space. So, they had that beautiful red wallpaper. You know, it's just such a gorgeous space. If you have a chance to visit the Alchemy Collective Cafe in North Oakland,  it's really beautifully designed. These photos that I found online don't do justice to the space. It's a really lovely place.

So ten years later, they have their own shop. They host events there. I've been to poetry readings and after hours writing workshops, they're always using the space to make the community a richer, more robust place, supporting local culture and all that. And they are fully bossless and worker-owned. You know, I actually sat down, I took this photo, sat down in 2014 and observed one of their worker co-op management meetings, self-management meetings. And, you know, because I really wanted to see it, I was like, "is this real?" You know, can a co-op really be fully bossless? And yes, all workers at Alchemy Collective are owners.

It's consensus process, so if one person blocks a decision, then it it can't move forward until folks workshop it, and create something that everyone consents to. So a consensus process is how they manage. I think they might be a consensus plus one, so slightly modified consensus where at least two people have to block the proposal going forward, if I remember right, but don't quote me on that. But they use consensus process to make sure that everyone consents, because that's what it means to be co-owners of a business together. You know, other worker co-ops, especially larger ones, will sometimes use voting and other other types of democratic processes, but a smaller co-op, I think, can use consensus a bit easier. But there are ways that consensus can work in larger ones too.

So full worker-owned cafe. All right, so something I want to draw attention to real quick, another example of what I'm calling a nursing business, sort of like a nursing log, a nursing business might use their space and resources to give life to a new business. So, the Biofuel Oasis helped incubate Alchemy Cafe back when they were just a little table. In a similar way, University Press Books in Berkeley, where I worked, we actually incubated a new business on our back porch, Cafe Ohlone, run by members of the Ohlone Nation. And it's a cafe where they work to revitalize the Ohlone language and Ohlone cuisine, and they started out as a pop-up, like two days a week, on our back porch -- on the back porch of this bookstore. And as you can see, it's really beautifully decked out. But like, you know, that's the size of this porch. And they really made it work as a cafe. And now they have their own space.

So, you can start as a pop-up. You can find a like minded business and see if you can work something out to sort of be incubated in their space until you raised enough funds to get your own space. That's something that's totally done all the time.

So, another process: converting legacy businesses. And I put the NWCDC page on the Legacy Project up here. So, a number of small businesses, you know, the small business owners are retiring. The baby boomers will all be 60 years old by 2024, and as business owners from this cohort plan their retirement, there's the question of how to keep their business around, how to preserve this business. So, some of them are selling the business to their employees, as a cooperative, or using other types of plans. But this can be an exciting way to keep legacy businesses around, if there isn't another plan for the business owners. So you can check out more about what the NWCDC is doing with legacy businesses at this website here, in the corner there.

And another funding idea: building support with the city. In 2019, in Berkeley, the city of Berkeley committed $100,000 to worker cooperative development. And this was part of an ongoing thing, where there was a pilot project and they were like, "okay, we're going to expand this and fund this." So much of that money goes to incubate new worker cooperatives, and transitions of legacy businesses into worker cooperatives. So sometimes, if folks really push into local energy around cooperatives, sometimes the city or other funding sources will realize how important these things are to support, and that can lead to funding to help to help start up co-ops.

And also Group Health started as a co-op, and they sometimes give grants to co-ops and co-op affiliated organizations. You can check out more, and this is in Washington State, at this website here. But yeah, the Group Health Foundation, that's just one example of many places where you might think of finding funds. So, we've now talked about a couple a couple ways to approach this. You know, you might do crowdfunding, you might, slowly build energy in the city or with some municipal institutions and get funding that way, or apply for grants. Grants are out there.

So housing co-ops: let's think about housing co-ops on the cheap real quick. You can try doing a co-op rental. So yeah, here's kind of the recipe. I was just explaining this to someone who was asking about it. I ended up doing a thing, and I'm not going to read that whole thing, but basically I found a group that was interested using Craigslist. It was me and one other friend. We wrote out our co-op house bylaws, figured out some intentions for the space, and then we put that on Craigslist and ended up having a bunch of people respond. And we interviewed 20 people before we narrowed it down to five other folks with us, who helped us search for three months to find a beautiful green Victorian that we all rented together in West Lake, California, in a neighborhood in Los Angeles. And we ended up paying half the market rate for our rooms and also had like giant living rooms. It was really, really nice just to create a rental, with the co-op agreement, as a group and rental co-ops are definitely treated as as regular co-ops.

And I'm just going to encourage you to check out this article on Shareable.com from last year actually: "How to start a housing co-op." It has a lot of good information there by someone who does housing co-op development. It's in California, but a lot of these things apply elsewhere. And it includes doing rental co-ops, finding a mentor from another successful co-op, all these things. I should say that I had already lived in co-op houses in Berkeley for about five years before I started the co-op house in Los Angeles. So I was kind of I was kind of the mentor for it, for that house.

But I would say, personally, my experience with co-op housing has been in California. So you really want to find, if you're starting a co-op house in Washington State, some experienced co-op housing people from Washington State, because they're going to know the legal code and approaches a little better than myself. But if you're just starting a rental, that's basically the same here. And so this was the process for the rental. The cool thing about starting a rental is it can be a great way to build support towards eventually getting a land trust, or another kind of support. So if you're all renting a house together, and then you start maybe working with the land trust, that might buy a house that you can move into and build equity towards ownership, or whatever the plan is -- renting together, and having a cooperative house agreement together, and abiding by that, and having consensus meetings, all that stuff is going to look really good for the kinds of organizations that support co-op house purchasing and incubation.

Okay. And another quick example that I brought up in the last two weeks when somebody was asking me about ideas for starting a larger scale co-op: a really cool example to think about is the Los Angeles Eco-Village. They're almost 30 years old and they have this thing, the Ecological Revolving Loan Fund, where they basically created a small community loan fund that was specifically designed to do their project. And their project is just so, so cool and exciting because they host permaculture retreats there, so people live there. It's like a live/work space. But they also do a lot of work to support this common cause of helping Los Angeles become more sustainable. So you can think about maybe if you want to do some kind of large scale housing situation that the community would be excited about, you might think about starting a revolving loan fund, and trying that approach, kind of similar to crowdfunding, in a way, but it's also a loan fund. So very worth checking this out. The URL is down there in the left corner, if you want to go to the website and read their factsheet with info on that.

Okay. So here's some resources, some websites you can visit. Do be sure to check out the Alchemy Collective fundraising video. It's just fun and can give you an idea of how you can approach crowdfunding a co-op. And here's my contact info. Lots of luck with your endeavors. I hope that you'll use the listserv to reach out to other folks in the co-op community and voice those ideas because sometimes just sharing what it is you want to do, you'll find out about amazing community resources. So sometimes just sharing your idea is a great way to get the ball rolling. Okay, have have a great week.

This transcript has been lightly edited for readability.