Start-up Capital and Membership Fees

Depending on the nature of the business, the cooperative may or may not require start-up capital. In either case, the founders may choose to set a membership fee, payable by all members (including the founders). If for no other reason, the fee can act as barrier to entry, improving the probability that only serious individuals will join. The fee should be equal for all members. Payment of membership fees should not grant members any right to future profits of the business -- that is to say that there should be no silent partners. Profits should be distributed based on reputation and contribution to cooperative, not based on the payment of fees or investment. The implication of this approach is that members will pay the membership fee with the full knowledge that they will not receive any share of profits unless they participate and contribute to the operations of the business - nobody gets a free ride. This further ensures that members will have serious intentions when joining.

One way to raise some capital is to start your own currency.

Pre-sell future outputs of the blog coop community by exchanging $/£ for a new blog coop currency that can only be used to buy blog coop products and services.

A good article about local currencies that includes a bit about a deli that did just this and raised money by selling deli-dollars with staggered use-after dates can be found here

Loads more good articles and links about reinventing money can be found at reinventingmoney.com

Surely if profits are only distributed according to contributions and reputation, no barriers to entry are necessary?

If people want to contribute, why should they have to pay?

Afterall, if their contributions are not valued by other members, they get diddly.

I think membership fees should be avoided if at all possible.

Imagine if there had been fees to start with, how many of us would be here contributing now?

The idea behind needing "barrier to entry" is to improve the probability that only serious individuals would join, thus reducing noise, etc. I suppose if the reputation system was strong enough, non-serious people (or troublemakers) could be handled by system in way that doesn't disrupt the activity and discussions of the serious members.

Your point about membership fees and their impact on getting a discussion going (like this site) is a good one.

One way of only getting serious people without asking for money, is to do some of the things mentioned in accepting new members

Another method I am thinking of using for uniteddiversity is to ask all members to set up a standing order/ direct debit for £10 a month, but to give back in return ud£10, accepted as payment for all things ud (e.g. at our live music events and in our online bookshop). That way there is real financial commitment, but it doesn't really cost anything because £10 = ud£10, the only difference being that ud£10 can only be spent within the community, doing trades with other members.

The standing order approach may work well for some kinds of business (the sale of products or services to individuals, for example) but won't be well-suited to other forms of business, such as business that sells services to businesses, such as a web presence consulting practice.

Blog Coops should, I think, be based around fulfilling members self-defined needs (as well as promoting new organisational structures to mainstream business in the defunct global economy).

So long as they are about providing for these needs directly (as opposed to trying to get enough money out of standard corporates), the standing order approach (or something similar) could work.

Also, since Blogger and TypePad etc give anyone a pretty damn good web presence, instantly, I'm not sure the web presence consultancy (WPC) is such a good idea - more comments on this at web presence consulting

It's not that a WPC wouldn't work, just that I think the blog coop model could more effectively be used to promote much needed social change and the radical democratisation of democracy.