A group of veteran entrepreneurs launched Start.coop this week, the first US-based accelerator for cooperatively owned startups looking to scale. The group plans to raise over $2.5 million to help startups use distributed ownership models to create economies of scale, whether through well-established group purchasing models or through newer tech based “platform co-ops.” The accelerator is accepting applications for its first class starting this July.
The unique co-ownership structure of co-ops makes them incompatible with most existing accelerators and venture capital deals. Rather than looking to sell equity to investors, these entrepreneurs are looking to share their equity with their employees, customers, or users. Entrepreneurs from a wide range of sectors have already expressed an interest in applying to the accelerator. Possible participants include a team launching a driver-owned competitor to Uber, a purchasing co-op for local energy dealers, and a tech start-up in which patients own the profits on health research. Through Start.coop, each startup will receive an initial $10,000 in cash, and will have the chance to learn best practices from established mentors.
The initiative is led by Greg Brodsky, a 41-year-old Boston-based entrepreneur who has built national purchasing co-ops in both the bicycle and craft beer industries, and who is also the board chair of the Cooperative Development Institute.
“There is a new generation of entrepreneurs looking to create more equitable business models,” Brodsky says. “We believe there is a substantial opportunity in creating an accelerator that caters to this emerging market.”
Co-ops use a distributed ownership model that is not widely understood, even though it is surprisingly widespread in the U.S. economy, including businesses like REI, Ace Hardware, Ocean Spray, and Cabot. Brodsky said, “The applicability of the business model is vast. Co-ops are a distributed ownership model that shares profits back to a broader pool of owners. Co-ops have particular potential to create economies of scale for economically disadvantaged groups such as women, minorities, immigrants, family businesses, and veterans.”
Nathan Schneider, a professor of media studies at the University of Colorado Boulder and a leading advocate for tech based “platform co-ops,” is part of Start.coop’s planning team. “As concerns grow over the behavior of dominant online platforms, cooperative models enable startups to build accountability and trust into the core of a business,” Schneider says. “This way, we can create a genuine sharing economy.”
One of the most successful platform co-ops is Stocksy United, a high quality stock-photo and video sharing platform owned by its photographers. Stocksy had over $9 million in total revenue last year and has distributed over $5 million in profits back to its member-owners.
The planning team also includes Lindsay Gaskins, former vice president at the incubator Sandbox Ventures, Camille Kerr, a lawyer and co-op developer at the ICA Group, Helene Lesterlin, who designs and launches white-label accelerator programs with a focus on social innovation startups, Felipe Witchger, a founder of the Community Purchasing Alliance in Washington, DC, and Greg’s father Howard Brodsky, who is a Co-op Hall of Fame inductee, as the founder and co-CEO of CCA Global Partners.
“We will arm participants with the very best tools and services to run a successful business at scale,” says Greg Brodsky. “Yes, we believe cooperative models are better because they return profits to their communities, but they are still real businesses that need to have the best tools to compete with the Amazons and Walmarts of the world.”
More information on applying to the inaugural class can be found online at Start.coop.
Greg Brodsky Founder, Start.coop