Co-ops are owned by a community, eg customers can be members. Employee owned businesses are just owned by the employees. It’s a relatively new thing, however where it’s being implemented in the UK it’s more of a tax fiddle - the business owner gets their business to buy itself from themselves, then the owner gets zero capital gains tax. If you sell a business for £25 million, you save on a £5 million tax bill. It’s great for people looking to get their investment out of a cash-rich business.
It’s still a pretty good idea, but I’m not holding my breath to see the range of companies adopting Employee Owned practice actually pass on all of the benefits to their employees.
Either way though I’m fine with Valve being a private business, at the bare minimum it retains the opportunity of being better than a publicly traded company. Also, it’s not like video games are some essential service that really belongs under social ownership.
@TWeaK I’m a little confused about the overall post and the UK position since we are talking about an American company but yes, alternative business models are needed. Thank you for contributing.
The UK example was more about their method of transitioning from private ownership to employee ownership, basically me going on a tangent to say that it isn’t always all great. However the nature of the different types of business ownership is consistent everywhere, more or less.
Private ownership - the business works for the owner(s).
Employee ownership - the business works for the employee shareholders.
Co-op - the business works for the co-op member shareholders.
Publicly traded - the business works for the public shareholders. Additionally, the CEO is bound to this by law (both in US and UK, and most other places I imagine), not just their employment contract, and in practice this means the CEO must pursue profits because that’s always what the vast majority of the stock market wants.
Valve is up there at private ownership, not employee ownership. Arguably employee or co-op ownership might be better, but I’m just happy it’s not public.
Like you say, a co-op business in the game space would be interesting. Something like a mutual insurance company, where the customers also own shares in the business.
Co-ops are owned by a community, eg customers can be members. Employee owned businesses are just owned by the employees. It’s a relatively new thing, however where it’s being implemented in the UK it’s more of a tax fiddle - the business owner gets their business to buy itself from themselves, then the owner gets zero capital gains tax. If you sell a business for £25 million, you save on a £5 million tax bill. It’s great for people looking to get their investment out of a cash-rich business.
It’s still a pretty good idea, but I’m not holding my breath to see the range of companies adopting Employee Owned practice actually pass on all of the benefits to their employees.
Either way though I’m fine with Valve being a private business, at the bare minimum it retains the opportunity of being better than a publicly traded company. Also, it’s not like video games are some essential service that really belongs under social ownership.
@TWeaK I’m a little confused about the overall post and the UK position since we are talking about an American company but yes, alternative business models are needed. Thank you for contributing.
The UK example was more about their method of transitioning from private ownership to employee ownership, basically me going on a tangent to say that it isn’t always all great. However the nature of the different types of business ownership is consistent everywhere, more or less.
Valve is up there at private ownership, not employee ownership. Arguably employee or co-op ownership might be better, but I’m just happy it’s not public.
Like you say, a co-op business in the game space would be interesting. Something like a mutual insurance company, where the customers also own shares in the business.