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Catalyzing worker co-ops & the solidarity economy

Cooperatives and Crowdfunding: A Natural Fit

First, since crowdfunding relies on reaching a large crowd, having more owners means you will have a larger set of networks to access.

Second, many of the advantages of cooperatives—community focus, local mission, human connection to the business—can really resonate with potential investors, especially those that are attracted to crowdfunding investments.

Third, although cooperatives across the country can take advantage of Reg CF to launch a crowdfunding campaign, California Cooperative Corporations can access as a special crowdfunding exemption from state and federal securities law registration requirements.  

Cooperatives are such a natural fit with crowdfunding that the California legislature recently passed a special securities law exemption exclusive to California Cooperative Corporations. These entities can now offer shares for up to $1,000 each to Community Investors who live in California. (See, Cal. Corp. Code 25100(r); 12238(f)). Community Investors are what they sound like—investors who are not active worker members. Like most crowdfunding investors, Community Investors are generally passive, with a few very limited approval rights. (Cal Corp. Code 12253).

Read the rest at Crowdfund Better


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