The following is an excerpt from our 76-page Exit to Community primer. Download the whole thing here!
Founders pour themselves and their resources and energy into building their startup like their own baby, but then, unlike a child, they sell it off to the highest bidders. A lot of founders would love to change the world for the better, right? But the usual endgame—the “exit”—for a successful startup is how many of their creations end up getting bought by bigger, old-world companies or going public on the grand-old establishmentarian casino, the stock market. Why do we even bother? Startups need a new story about what and who they are for. Exit to Community (E2C) is a strategy in the making. It’s a different kind of story, one that connects the founders, workers, users, investors, activists, and friends who have been trying to feel their way toward a better kind of startup. Its endgame is to be a long-term asset for its community, co-owned and co-governed by those who give it life. We are overdue for a better way. The usual startup story’s feedback loops are spinning out of control. Gig platforms offer a dystopian “future of work,” wiping away long-fought-for protections that anyone selling their labor should have. We think it would be far more excellent to make startups that spread wealth across communities. We think startups would be more usefully disruptive if they delivered their rewards to the people who make them valuable rather than to the already wealthy. Our technology could have more capacity for good if it were accountable to the people who use and build it. Startups that create active, loyal communities of workers and users should have the chance to exit to community— ensuring those communities meaningfully co-own the company and help to determine its fate. Real democracy should be at least as available as more oligarchy. When crises strike, we should be able to turn to our people, not just the faceless market. For those working on the front lines of economic justice, E2C offers a preliminary map for how to transition these enterprises to shared ownership models—inspired by a long legacy of shared ownership among marginalized people. We hope it will catalyze conversations in neighborhoods, cities, and states as we embark on the necessary work of reimagining our economy.