But in terms of getting a company off the ground right now, you'll have difficulty getting financing and as companies start off they generally have no or limited profits to distribute. In times when financing is easy, perhaps that's no big deal -- get easy access to capital to pay a liquid salary, and then give people equity for a share in future profits.

Right now, however, I would be very wary of starting a company, especially if you're planning on starting a type company that limits your ability to seek investment.

...and 100% of the losses.

Most cooperatives are limited liability companies. Just like most private companies.

The only difference is in who the owners are. Pretty simple.

Just like any other companies they can be profitable or unprofitable or even go bankrupt and shut down.

If a limited liability company goes bankrupt nobody is going to take your house. That's the whole point.

That means you would lose your invested capital (as it should be), but you are not being hit by 100% of the losses.

Draw an accounting fence around the 100% employee-owned coop. Any losses could only come from capital invested or retained earnings (losses to the employees) or from bad credit extended to the coop. It’s true that the latter represents an opportunity for there to be losses that don’t hit the employee owners, but that’s typically only after the company is wiped out, so it’s a “good news, bad news, but mostly bad news” situation if being an LLC is coming into play.

For an on-going operating company, 100% of the gains and losses accrue to the owners (employees in the case of a 100% employee-owned entity). That’s working as intended/designed/desired.

I mean, the point is that the difference between working for a company and being part owner of a co-op is the difference between you still earning the same salary or you earning nothing and owing creditors.

On the contrary.

When a company is healthy it is able to pay salaries to employees and profit to owners. When it's bankrupt is paying 0 salaries and 0 dividends.

When it's in trouble, a company will have to choose who to sacrifice: firing employees or cutting dividends. The priority of privately owned companies is to maximize value for the shareholders. They are more important than employees, by design.

In a coop workers and owners are the same people so they are the first priority, that's all.

Statistics show very clearly that coops have a higher survival rate.

> you earning nothing and owing creditors

Once again, no, as an owner of a limited company going bankrupt you don't owe to creditors.

Oh, you can owe money you personally guaranteed. You're also jointly and severally liable in a general partnership. LLCs are nice in that you can have the tax benefits of a partnership and the liability protection of a corporation if set up correctly. This 'corporate veil's only puts the value of the money that you put into the corporation at risk i.e. the value of your investment. However, certain actions could 'pierce' the corporate veil if the LLC is setup incorrectly or if certain conditions are met.

From an accounting standpoint, GAAP doesn't much care if you're a private company with shareholders or if you're a private company with employee-owners. There are tax nuances and accounting for equity differences, but the books are mostly the same animal.

>Statistics show very clearly that coops have a higher survival rate.

Your claim is easily refuted by pointing out that of all of the largest most profitable companies in the world, none are co-ops. Not a single one.

I wrote "higher survival rate", and you can easily find many studies online.

I did not wrote "most profitable". They are very different concepts.

Does this mean that the more you hire, the poorer existing employees become due to dilution?

Just like any other company, if a company emits more stocks does the value of the stock goes down?

Almost never, because the company emits stocks (or hires people) only when profits are growing.