Extra, Extra! Extra Equity Shares Help Fund Co-op Relocation

I can hear the shouts from my bedroom:

“Wait a minute, Katrina! Didn’t you just write a blog entry asking us to help raise money? Why are you asking us again? We already raised all the member loans!”

Let’s take that last shout first—you’re right, we did raise all $250,000 in loans, and I’m still amazed and proud of us every time I think of that. The thing is, however, that member loans are not the only source of member funding for the relocation. We need to raise another $45,000 in donations and member equity to complete the member part of the funding. If you think of member funding as three-pronged, we’ve got one prong taken care of—that’s the member loan part. Now we need to concentrate on the other two prongs—donations and equity.

If you look at the broader picture, member funding is just one of the sources that we are using to make this move happen. Sources are where we get the money for the relocation. Uses are where we spend the money for the relocation. The sources are like ingredients that go into making a pie, and the uses are the pieces that are carved from that pie. Member funding, and member equity in specific, is a really crucial ingredient, because it helps guarantee other sources of funding, like the bank loan. This is because equity is an asset, not a liability. As great as member loans are, they are debts that we have to pay back, and that makes them a liability. Member equity, on the other hand, is an asset because it’s an investment that is non-interest bearing and only has to be paid back if the member requests it. Banks like the look of a balance sheet that’s rife with member equity, and that’s exactly what we want ours to look like.

Equity and donations are also great sources of member funding because they present a different and sometimes more feasible route of supporting the co-op. Donations can be made in any amount—even rounding up by cents at the register helps! Extra equity can be purchased in shares of $60 each, and you can buy up to 10 shares. These shares are non-voting shares that allow you to invest up to $600 in your co-op. If you couldn’t make a member loan, consider purchasing a couple of these equity shares.

Here, the board does owe you an apology. We haven’t had the extra equity certificates ready in a timely fashion, and we are sorry. We’ve gotten caught up in some legal hula-hoops concerning the precise language on the certificates, and we are ironing it out so that you can purchase extra equity and have proper documentation saying that you did so.

We are trying to get all the equity and donations in by June 30th—and we are already half of the way there! According to the handy handout in the store, we have already reached $25,000 through new membership equity, extra equity shares, and donations. Oh yeah—we are in the midst of a membership drive, so bring in your friends to become members, and we’ll reach our equity goal even faster!

So let’s concentrate on filling up that beet that we've been hearing so much about in the store and in the weekly Bytes. Or, if you’d like to indulge your sweet tooth, think about extra equity as the secret ingredient for the pie we are baking, and let’s throw a little more into the mixing bowl.