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This Company Asked Its Employees for Cash and Everybody Won For the right kind of business, a radical move like asking employees to finance the company can be smart and effective.

By Michelle Goodman

This story appears in the March 2016 issue of Entrepreneur. Subscribe »

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When Boulder-based solar energy company Namaste Solar first went looking for capital to expand in 2004, it could have gone through the hassle of securing a bank loan or put together a dog-and-pony show to attract outside investors. But the company decided it wanted to partner with the people who knew the business better than anyone: its own staff.

Namaste invited its employees to buy up to 10,000 shares in the company apiece. The response blew cofounder Blake Jones away, with employees borrowing money from their friends and family to buy in. "The average employee investment was somewhere between $15,000 and $25,000," Jones says. "And one person invested $100,000."

Namaste operates what's known as a worker co-op, a for-profit company owned and governed by its employees. Usually the domain of idealists concerned with workers' rights, co-ops give interested employees a democratic vote in key business decisions and a cut of the profits. But they can also be a smart economic decision for businesses -- so long as the conditions are right.