28 Mar Equitable Economy Fund
Equitable Economy Fund
Interview with Greg Brodsky; Managing Member of the Equitable Economy Fund
Jen: How was the Equitable Economy Fund Created?
Greg: The fund was spun out from Start.coop, the nation’s premier cooperative accelerator because we saw that the lack of outside equity was limited cooperative growth. We launched the fund to provide more flexible equity and equity like capital to cooperatives. The fund is 20% owned cooperatively by the graduates of the accelerator. See this longer form two part blog post here on why we formed the fund and our thinking. https://medium.com/start-coop/how-to-invest-in-cooperatives-part-one-52f69350d16
Jen: How are your investment funds catalytic in a way that is different from other funds?
Greg: The fund’s primary investment focus is to develop a diversified portfolio of shared ownership companies in various stages of development that can demonstrate a commitment to share wealth with people of color, women, immigrants and other marginalized populations. We are catalytic in that we provide equity financing in a sector that has only ever offered debt to cooperatives. The lack of outside equity has historically limited cooperative growth, and we are the very first fund to focus exclusively on unlocking that kind of capital to expand cooperative ownership. For an example of our impact, look at our portfolio company The Drivers Cooperative, which is a driver owned rideshare in NYC that now has over 5000 drivers who own the company. https://drivers.coop/ and https://www.nytimes.com/2021/05/28/technology/nyc-uber-lyft-the-drivers-cooperative.html
Jen: How do you describe the kind of non-financial returns the fund offers?
Greg: Our primary impact returns are:
- Increase in democratic governance.
- Reduction of wealth inequality.
- Expansion of BIPOC ownership.
Jen: Can you describe how you use integrated capital to do your work?
Driver-owners at The Drivers Cooperative in New York City celebrate the launch of their rideshare app in May 2021. Over 6000 drivers have now signed up, with drivers earning 20-30% more per hour. Photo Credit: The Drivers Cooperative
Greg: Investment is just one part of the support structure we offer. The Equitable Economy Fund, in conjunction with our broader Start.coop network connects our graduates to mentorship, peer learning, partner service providers, and investment. And the impact of our work is quickly expanding the cooperative sector by enrolling over 600 cooperative entrepreneurs to participate in our free, self-paced online course Lean Coop over the past year alone. See https://www.start.coop/build and https://startcoop.teachable.com/p/lean-co-op
Jen: How do you address racial justice, income inequality, and/or gender justice through your products and services?
Greg: The fund organizers seek to develop an anti-racist approach that reverses wealth inequality. We believe one of the many ways our society can narrow the wealth equity gap is by building companies that have an explicit intention to share equity, wealth and power with marginalized communities. The cooperative model empowers these communities to unlock economic leverage, create network effects, and build wealth for those who have been historically excluded.
Jen: What do you tell people who think your fund is risky?
Greg: The systemic risk is that consolidation of ownership is increasing every year. Over the last 30 years in the US alone, the top 1% of the population has grown $21 trillion dollars wealthier, while the bottom 50% of the population has grown $900 billion poorer, with a disproportionate impact on people of color. The economy is structured in such a way that wealth at the top continues to accelerate, because those who own the wealth distributed by public and private companies are the same people who can afford to invest again. For people of color, the situation is even more urgent: the median black family owns just 2% of the average wealth of the median white family.
By widening the pool of ownership beyond traditional shareholders to also include consumers, workers, farmers, health care patients, platform users and other populations, cooperative ownership can unlock wealth creation and governance rights for traditionally excluded populations. We just financed a conversion to worker ownership for an 18 year old web marketing firm called Pixel Spoke to bring their workers into the ownership, governance, and profit sharing!
Investment Thesis/What is your rationale for your approach to investing? The Equitable Economy Fund is a $2m equity fund designed to provide capital that can accelerate cooperatively-owned and shared ownership companies, while also providing a financial return to limited partners. Investments are sourced from the Start.coop accelerator for seed-stage businesses and our larger network of shared ownership businesses at different growth stages.
Geography: US Only
Year Founded: 2020
# of Investments: 5
# of Investors: 29+ (donors, funders, supporters, investors)
Funds Raised: $750,000 since inception
What’s on Greg’s Mind?
Book: Good Inside: A Guide To Becoming The Parent You Want To Be, by Dr. Becky Kennedy
Song: None
Podcast: The Way Work Should Work, by Braintrust