• How would you capitalize?

There are two primary ways to raise funds for startup:

1. Pre-incorporation dues: During the “club phase,” owners will contribute funds periodically to establish the governance and initial systems. Volunteer efforts only during the club phase.

2. Post-incorporation labor contracts: Similar to a hiring agency, the CEO can negotiate labor contracts with other businesses with the goal of hiring out owner labor to bring in initial capital. The owner gets a paycheck and the margin goes toward capitalization of the business plan, a win/win. The percentage of the labor contract value that is paid to the owners doing the labor should be fixed by vote, and all bonus pay must be suspended while labor contracts are active since they are a funding mechanism, not a business model.

This plan is helpful because it no longer requires workers to have the same employer just to organize, you can simply create your corporation independently and with whomever you like. Additionally, the larger and more specialized your co-op is, the greater your bargaining power will be.

The startup sequence becomes:

Sever Setup >> Recruitment >> Elections >> Dues >> Incorporation (C-Corp) >> Labor Contracts >> Business Plan Implementation

Read the Master Staffing Agreement template.