Worker Cooperative Initiative | City of Santa Clara

Worker Ownership Transitions for a Stronger Local Economy

The Worker Cooperative Initiative supports business owners and their workers to transition to employee ownership as a succession option. The City of Santa Clara and its partners offers expert consultation, training, and legal advice at no cost to you.

4 out 5 owners have difficulty finding buyers for their businesses when they are ready to exit. Worker ownership is a smart business option that can help you secure the financial benefits of your investment and hard work, ensuring you a fair market price while preserving your legacy.

Find out if worker ownership is right for you. Project Equity, an initiative partner, will offer a no obligation, one-on-one consultation to answer your questions, discuss your succession goals, and help you assess if a transition to employee ownership is right for your business.

View the landscape analysis of Santa Clara and why it is important to retain our longstanding businesses.

What is a worker cooperative

Worker ownership can help business owners retire, preserve jobs, and help workers build wealth.

A worker cooperative is a business that is owned and controlled by the people who work there. Worker cooperatives typically sell one membership share to each employee, which entitles them to rights of participation, information, and financial reward.

Worker Cooperative Initiative

At the governance level, members vote for and are eligible to serve on the cooperative’s board of directors. Cooperative governance is distinct from management, which can take many forms from traditional to participatory to fully collective, and is generally adapted to the size, industry and business needs of the cooperative.

Worker-owned companies provide more opportunities for workers to build wealth, particularly workers of color. Workers at employee-owned companies are seven times less likely to be laid off than their counterparts. And workers of color at employee-owned companies also have 79 percent higher median household net worth and 30 percent higher median income from wages than their counterparts.

For More Information

For questions or information about the Worker Cooperative Initiative, email manager@santaclaraca.gov or call 408-615-2210.

Past City Council Actions and Presentations

Santa Clara is known as a vibrant center for technology and innovation. With more than 12,000 businesses making the city their home, it is vital that we support locally-owned businesses that are at risk of closure learn about how employee ownership can help owners retire, preserve jobs, and support business continuity.

Santa Clara has launched its Worker Cooperative Initiative to address the potential retirement of many business owners by providing technical assistance and resources to transition to employee ownership.

The initiative is being implemented in partnership with Bay Area headquartered nonprofit organizations Project Equity and the Democracy at Work Institute and in collaboration with the Sustainable Economies Law Center and the US Federation of Worker Cooperatives.

Business owners taking full advantage of the initiative can access expert support with implementing transitions to employee ownership all while building sustainable business models that offer true wealth-building opportunities for their workers.

Specific services offered to eligible businesses include the following (some free of charge, others with professional service fees):

Free consultations for business owners considering a sale, exit or ways to engage their employees
Feasibility studies including an estimate of sale price in the case of an employee-ownership transition
Business Readiness Assessment
Guidance through the sale process
Training and education for founders, managers, and workers to support a successful ownership transition

“Small, locally owned businesses are essential to Santa Clara’s economy and community vitality. Now, more than ever, solutions are needed that create economic resiliency for workers and local economies. We have the opportunity to keep many of these businesses locally-owned for the long term and to deepen their positive impact on our economy.” - Santa Clara Mayor, Lisa M. Gillmor.

For more information on the service providers:

Project Equity is a national leader in the movement to harness employee ownership to maintain thriving local business communities, honor selling owners’ legacies and address income and wealth inequality. We work to foster economic resiliency with low-income communities and communities of color by demonstrating and replicating strategies that increase worker ownership. Learn more at https://project-equity.org.

The Democracy at Work Institute has a mission to expand the worker cooperative model to reach communities most directly affected by social and economic inequality, specifically people of color, recent immigrants, and low-wage workforces. It is a movement-based think-and-do tank supporting worker cooperatives to grow to a scale that creates meaningful change in the economy. Learn more at https://institute.coop.

The Sustainable Economies Law Center cultivates a new legal landscape that supports community resilience and grassroots economic empowerment. We provide essential legal tools - education, research, advice, and advocacy - so communities everywhere can develop their own sustainable sources of food, housing, energy, jobs, and other vital aspects of a thriving community. Learn more at http://theselc.org.

The US Federation of Worker Cooperatives (USFWC) is the national grassroots membership organization for worker cooperatives. Our mission is to build a thriving cooperative movement of stable, empowering jobs through worker-ownership. We advance worker-owned, -managed, and -governed workplaces through cooperative education, advocacy and development. Learn more at https://usworker.coop

Past events and meetings

05-19-2021: Economic Development, Communications, and Marketing Committee Meeting

03-03-2021: Economic Development, Communications, and Marketing Committee Meetings

01-26-2021: City Council meeting Special Order of Business - Presentation on the Worker Cooperative Initiative and Project Equity’s small business data survey

11-18-2020 Economic Development, Communications, and Marketing Committee Meeting

08-19-2020 Economic Development, Communications, and Marketing Committee Meeting

03-24-2020 Santa Clara Worker Cooperative Resolution in Support of Worker Cooperatives

07-09-2019 City Council Cooperative Study Session

Past Events

October 14, 2021 - Worker Cooperative Final Report and Presentation

Watch the October 14 webinar
View the Final Report
September 16, 2021 - Worker Cooperative Democratic Governance & Management Webinar
How do you spread ownership and control across a group of people? This workshop will provide fundamentals to entrepreneurs and workers interested in learning lessons from the worker coop community on democratic governance and participatory management.

Watch the September 16 webinar

August 9, 2021 - Legal Steps in a Worker Cooperative Conversion and Business Owner Forum
The Sustainable Economies Law Center shared legal steps to converting to a worker cooperative in CA and in compliance with federal regulations. Selling owners and employees heard directly from highly experienced worker-owners to understand why they sold their business to their employees and "how it works" on a day-to-day basis within a worker co-op.

Watch the August 9 webinar
July 14, 2021 - Worker Co-op Entity Formation for CA Worker Co-ops Webinar
What is a business entity, anyway, and when should you form one? And which is right for your cooperative enterprise? In this teach-in, Sustainable Economies Law Center Staff Attorney Gregory Jackson will provide an introduction to what legal entities are and the pros and cons of choosing one legal entity over another for California based worker cooperatives.

Watch the July 14 webinar
June 10, 2021 – Worker Co-op Fundamentals
Learn about the key steps toward getting your worker cooperative off the ground, and building democratic capacity for your business.

Watch the June 10 webinar
May 25, 2021 – Business Owner Forum
Learn about worker-owned business models directly from business owners like you! The event will feature a panel discussion with founders of successful worker-owned businesses and explore how an employee buyout via a worker-owned cooperatives transition was the right choice for them.

Watch the May 25 webinar
Worker Owned 101: Thursday, April 22, 2021 at 12 PM PST
Worker Owned 101 allows Santa Clara businesses and business service providers to explore the benefits of the worker-owned business model and why small business owners should consider a transition to worker ownership as a succession option. Transitioning to worker ownership via an employee buy-out allows you to:
- Secure the financial benefits of your investment and hard work
- Retain quality jobs for employees
- Preserve the legacy of the company to continue and operate locally
Watch the April 22 webinar

Worker Owned 101: Thursday, February 25, 2021 at 12 PM PST
Worker Owned 101 allows Santa Clara businesses and business service providers to explore the benefits of the worker-owned business model and why small business owners should consider a transition to worker ownership as a succession option. Transitioning to worker ownership via an employee buy-out allows you to:
- Secure the financial benefits of your investment and hard work
- Retain quality jobs for employees
- Preserve the legacy of the company to continue and operate locally
Watch the February 25 webinar

Small Business Landscape: Keeping local business rooted in Santa Clara

In a study focused on retaining local businesses, Project Equity analyzed data on more than 6,000 Santa Clara firms to quantify the number of privately-held companies that have employees and are 20 or more years old. Businesses that reach this milestone have built strong companies and may be in need of succession planning (data suggests that upwards of 80% of owners do not have a succession plan in place). Moreover, with the impacts of COVID-19, many owners could accelerate their plans to exit their business. Without plans or support, such businesses are at risk of joining the four out of five businesses unable to find a buyer - ending jobs and impacting communities. Impact of Legacy Businesses

This study, commissioned by the City of Santa Clara, demonstrates the potential impact if these businesses are not retained. Fewer than 20% of Santa Clara businesses are 20 years or older (1,138 companies). Yet these businesses,

employ more than 33% of private sector employees (20,000 workers)
generate 57% of small business revenue ($6.2B)

A transition to worker ownership is one more option businesses may explore to obtain a market sale price while retaining local jobs, creating more resilient businesses, anchoring wealth in the community, and maintaining a vibrant local economy. Learn more or schedule a free business consultation with Project Equity.

Resources

Tools for Business Owners

Becoming Employee Owned Toolkit- California (DAWI)
Legal Guide to Cooperative Conversions (SELC)

Employee Ownership Information

Employee Ownership Options (Project Equity)
The Case for Employee Ownership (Project Equity 2020)
2019 Worker Coop Census (DAWI/USFWC 2020)
Worker Coops: Weathering the Storm of COVID-19 and Beyond (DAWI/USFWC 2020)
Largest US Worker Cooperatives (DAWI)
Mature Worker Cooperatives (DAWI)

Community Resources

Bay Area Network of Worker Cooperatives: To connect with the rich Bay Area worker cooperative community, visit the Network of Bay Area Worker Cooperatives website and attend one of their upcoming events. NoBAWC (pronounced "No Boss") is a grassroots organization of democratic workplaces dedicated to building workplace democracy in the San Francisco Bay Area and beyond. Find out how to get involved, when their next General Membership Meeting, or upcoming NoBAWC events are on their website, nobawc.org!
National Network of Cooperatives: If you're looking to connect with the national hub for worker cooperatives, the professionals who serve them, and the organizations that support them, visit the US Federation of Worker Cooperatives' resource page. The USFWC, along with its affiliated organization, the Democracy at Work Institute, maintains a large library of model and working documents from and for worker cooperatives, as well as academic and practitioner research.
Mission College, Santa Clara’s two-year community college, has started its new Small Business Institute with a suite of classes and webinars including resources for Worker Cooperatives.

Last Updated:

08-28-2023