I’m Daniel from Cambridge. In the past 3-4 years I was dividing my time between Tadaptive - through which I work as a freelance UX designer, digital product designer & consultant, and as (currently) solo founder of AsWeThink - an early-stage platform for visual & digital innovation & knowledge management, and (maybe, hopefully) a wannabe co-op.
Years ago, it became obvious that the traditional path of (VC funded) growth & profit-oriented startups it’s not something I’m keen on to follow, or a path I would consider worthwhile to pursue.
While reading about social enterprises in general, and co-ops in specific, I ended up with the understanding that these forms might be closest to what I envisioned as a “fitting” legal form for AsWeThink (which is currently a “plain Ltd”), but I still perceive these forms as overly bureaucratic and hard to get started with. This impression was unfortunately strengthened by the different representatives of social incubators whom I’ve met a while ago, while I was trying to find out what it takes to “officially” become a “social enterprise”.
I’m here to learn more about what it would take to transition to a Ltd-based co-op, and to upgrade my somewhat ambivalent perception regarding co-ops (that it’s more simple than I believe now).
PS: I came across CoTech around a year ago, but it was back in October 2020, when I raised the question on Twitter: Why they are so few #tech #coops in the UK?, tagging @CoTech and other relevant twitter handles. I don’t think my question was answered, and I do think it’s still highly relevant. I didn’t know about this community forum until today, I ended up registering after reading #wikiWho can join CoTech. When it comes about tech co-ops in Cambridge area, I’m aware of Aptivate, know where their office is, but I don’t know anyone from there.
I would be happy to chat or meet people involved with tech co-ops in Cambridge area (or London, when pubs & coffee shops will finally open). Thank you!
hi there Daniel - welcome to CoTech. I lurk on here just to see what’s happening and so that i can occasionally say ‘look at Radical Routes’ book ‘How to Set Up a Workers Co-op’, which has a set of model articles for a Company Ltd by Guarantee with co-operative clauses in it.
And I think there’s an editable version of those articles on the Resources for Co-ops page of the Seeds for Change website, seedsforchange.org.uk
There is one clear difference between setting up a normal company and setting up a co-op, which is that you need to be at least two people to start a co-operative company and at least 3 to start a co-operative society. Very often my advice to people interested in co-ops is to find other people to co-operate with, before deciding everything about their business - to have proper equality and democracy in the group, people need to feel a sense of ownership over the big decisions. Good luck
Many thanks for these resources, I will consult them in more detail. I was aware of the “at least two people”, but not that the “Company Ltd by Guarantee” form is the way to go - thank you for that detail as well!
I just came across an answer to one of my initial questions. I’m sharing it here, maybe it’s relevant for other people thinking about the same:
Converting a Ltd by shares to Ltd by guarantee?
There is no statutory procedure for re-registering a company limited by shares to a company limited by guarantee. It is not possible to to convert the same corporate entity from one type of limited liability to the other. It is possible, however, to create a new company limited by guarantee under the same name and then to transfer the undertaking and assets from the ‘old’ company to the new one.
Hi again Daniel - it is perfectly possible to have a co-operative company limited by shares and Co-ops UK has a model set of articles for that here: Model governing documents | Co-operatives UK
The difference is that if it’s limited by shares, then the members directly own it/bits of it, whereas if it’s limited by guarantee, it can be said to be ‘in common ownership’, which is a more ‘commons’ political ideal. But plenty of workers co-ops are limited by share.
Hi Daniel, and welcome. I recently pointed another person - David - to this forum, who is interested to start a tech co-op. My advice to him was as Cath has suggested - find the others.
In response to your excellent question as to why there are so few tech co-ops, there are a number of factors involved, but my guess would be that the single biggest factor is lack of awareness that a co-operative approach is even an option. Very few ‘official’ sources of advice and information about business start-up provide any information at all about co-operative options. Of those that do mention it, the vast majority have so little knowledge that they may as well say nothing at all. Lots of sources also put a negative spin (complex, bureaucratic, slow, etc, etc.) again through a mix of ignorance and actually not wanting to have to deal with enquiries from people interested in pursuing a co-op option (because they don’t know how to deal with such enquiries).
The second big factor is likely to be about investment. The conventional model, as I’m sure you are aware, is that a founder will seek start-up capital from investors in exchange for equity. Whilst such an approach is technically feasible in a co-op structured as a share company, it’s a dangerous road to go down, because a co-operative is owned and democratically controlled by its members, so it’s not clear to me how an external investor can sensibly fit in that space. Recent innovations with Fairshares (see https://fairshares.coop) structures may offer a route. And co-ops looks weird to the VC as well, so that’s not really a great fit.
They no longer have an office btw. It’s mostly @tomd and @toml in Cambridge these days.
I’m also based in Cambridge, and I work remotely for https://opendataservices.coop/
(We are a Company Limited by Shares, with articles based on the Co-ops UK model articles.)
Hi Cath, thanks for the further details. As I understand, the model gov documents provided on the Co-operatives UK website, are for newly registered co-ops. Are there any CoTech members representing workers co-ops limited by share?
Thank you @Graham , I appreciate your time to answer my original question in such detail. Yes, I’m aware of the conventional funding model (I’ve been working with angel & VC-funded startups both as an employee, and as a freelance contractor). One of the few things I’m sure about, that I don’t want “traditional” external investors. I preferred to progress slowly, using my own limited funds, small grants, and tax credits to fund so far the development of AsWeThink Platform. And it’s not about the fear of giving up equity, it’s about trying to stay away from the mainstream funding model, the high-growth & profit-centric trajectory (I’m aware that any organization has to be profitable, and needs some level of growth to thrive).
While moving towards the current advanced working-prototype stage, even if relatively late, I recognized the need to reconsider both the organizational form, and the initial product/platform licensing options, that are more aligned with the initial purpose of supporting small organizations and their teams in their transition towards a regenerative, more sustainable, and equitable future.
Thank you for the Fairshares reference, I will check it out.
Thank you Ben for the updates, great to (virtually) meet someone from Cambridge.
Were you a co-op Ltd by shares from the beginning, or you transitioned to this form later on?
Yes, we might try and do Cambridge tech coops mini get together, once restrictions ease a bit more.
We were a co-op Ltd by shares from the beginning. We picked Ltd by shares because the co-op model articles allow for some kinds of investment, which we thought might be interesting. We’ve never actually pursued this, and its deliberately very limited (e.g. no voting rights for investors, to preserve one vote per worker-member).
not relevant to the CoTech query, but the CUK articles are for all companies, whether start-ups or not. If you want to change your company’s existing articles at any time, it’s straightforward to do it via the Companies House webfiling service, Make changes to your private limited company: Overview - GOV.UK
