Introducing the Exit to Community Collective

TLDR:

A new SCRF-supported project is documenting examples and strategies for “Exit to Community,” tokenized and otherwise.

By Jack Yates (originally at MEDLab)

The Exit to Community Collective (E2CC) is working to further the implementation of Exit to Community (E2C) initiatives—efforts to enable startups and other organizations to evolve toward ownership and control by their closest stakeholders. Since 2019, MEDLab has been advancing the E2C idea, particularly in collaboration with Zebras Unite. The E2CC is a new organization forming to continue this work by cultivating and spreading knowledge of the E2C concept and implementations of it.

The E2CC is a worker-managed collective formed through a virtual legal structure. With the platform Open Collective, which is itself exploring an E2C process, the E2CC is fiscally sponsored and manages its finances publicly and transparently. This reduces the barriers to formation that might come with being legally incorporated.

E2CC is involved in several parallel projects. One is a tool that aims to provide an introduction on what E2C is and how it can proceed, serving as a starting point for founders on how they can get started in implementing their Exit to Community. It is designed around common questions and conversations about key decision points that organizations face.

A series of eighteen case studies is in development to provide tangible examples of how an E2C works in practice. These are being written to be brief and accessible. Examples include diverse startups, including and blockchain initiatives, and they are tagged in order to draw connections among them. We hope that these cases can show the variety of forms E2C can take and help speed the process from conception to implementation. The collective is also in the process of creating a series of long-form narratives to provide a more detailed look at the implementation of an E2C example.

In the coming months, these and more resources will be available online. We hope they will be a significant step toward making community ownership more widespread. In the meantime, explore existing resources at e2c.how.

What resources can help advance the vision of E2C? How can the E2CC’s work make shared ownership more accessible for your community? And are you exploring or experimenting with community ownership? Want to add your E2C story and see others? Get in touch!

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@ntnsndr I would love to be a part of this work! Can you share more about how to volunteer your time to help the effort?

I think community ownership is one of the most transformational concepts that the blockchain and crypto communities have ignited. Although, this idea was around plenty earlier than before the tech and innovation space picked it up. Cooperatives are one of the oldest organizational structures. Intentional Communities have been an alternative to living and owning your community within the US and abroad. Shared ownership and equity is not a new concept. Even within the institution of marriage, shared equity is well understood (especially when it comes to divorce). Shared equity in housing is a space I am very passionate about, and has had several successful models for ownership like land or housing cooperatives; land trusts; and shared vesting equity agreements.

My own story with an E2C model never got beyond the ideation phase, but I attempted an idea around a combination of rent to own and shared equity in housing. Where an asset owner would essentially rent out their unit (either because they had to or wanted to) but would give a renter 1-5% equity every year (depending on the agreement between parties and market conditions) that they stayed in the home. The agreement would include a vesting timeframe. So a renter couldn’t pull their equity out simply whenever they wanted, nor could an asset owner hold the asset indefinitely without providing liquidity. I looked for an investment partner in this model. I think it takes a certain kind of person to want that altruism for the better of the community and to do better for the rental population (who simply needs to participate in equity building that they largely are already paying for). I planned for this to be a model that other independent landlords could adopt.

I think shared equity fundamentally changes participation in communities, and enables a whole class of people to move from renters to owners by:

  • Increasing legal and financial responsibility to the community
  • Incentivizing political participation (Welcome, you’re a property taxpayer!)
  • Contextualizing long-term community engagement (15 and 30 year mortgages create lifetime investments)
  • Changing mindsets around growth, opportunity, and cooperation (when you do better, I do better)

These are only a few of the thoughts I’ve seen in practice and from my own experience. I believe there are some great opportunities for empirical study here between social/cultural benefits and incentivization. The crypto/blockchain spheres talk a lot about this as a potential of tokenized impact (like tokenized carbon credits) but I have yet to see how tokenization is creating social good. Though this is the question I am in the space to answer.

Would love to hear other people’s E2C journeys!

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Amazing, Valerie! Thanks so much for this. Did you fill out the form there? That’s the best way to check in is to fill in that form at the end of the original post. But I shared your amazing post with the team as well:)

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The E2C concept is one of the best ideas in the crypto/web3 space, and I’m proud that SCRF has made such a substantial financial contribution to the E2C Collective.

What I’m quickly learning to love about the E2C initiative (and by extension all of @ntnsndr’s work) is that it unifies my hopes (and allays most of my fears) about the future we’re enabling with technology generally, and with crypto/web3 in particular.

It’s no coincidence that the “year of crypto” comes exactly at our last chance to resist the faux-philosophy of the “virtues of selfishness” (i.e., greed) that shamelessly aspires to replace the last scraps of human goodness with “personal sovereignty” (i.e., personal wealth acquisition).

In our games we mythologize our struggles in terms of Arthurian legend, but in actual life we act like we’re completely helpless. Cooperative shared ownership is the real-world equivalent of the sword in the stone. Do something with it.

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Thanks for these lovely reflections. Please don’t let my work allay your fears! E2C is just a brave little slingshot up against the general DeFi juggernaut.

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@valeriespina I would certainly agree with you about “it taking a certain kind of person”! At the risk of seeming too “ideological,” aren’t you talking about a person who refuses to accept “the free market” or “the sovereign individual” or (yikes!) “capitalism” as the sole bottom-line source of metrics for action in the world?

Isn’t the metric for your “certain kind of person” something closer to the greatest good for the greatest number, as opposed to the greatest good for me? If so, that sounds like the antithesis of Ayn Rand’s “virtues of selfishness,” which is a philosophical position that has always struck me as rather… selfish.

In fact, what you’re talking about sounds suspiciously like love in the religious sense. Is community love an acceptable concept in this context of startups / governance / investment / DAOs / web3 / etc. etc., or is love itself too ideological, religious, or “soft” an idea to be useful here?

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@rlombreglia from some of the rhetoric of some DAOs and web3 enthusiasts, it certainly seems like these soft ideas are compelling to many in the space. The technical question is how does one capture, measure, incentivize, and/or make these types of ideas transparent? The culture discussion on the Episode 1 Podcast unsurprisingly has a lot of connection here. It looks like @ttaloute21 is asking similar questions about capturing non-economic factors.

These are the discussions that are drawing me into the web3 space. I’m interested in community and how people form, maintain, and value those communities, Before us are opportunities to see concepts like social capital in more tangible and concrete ways. From an academic perspective, I’m also interested in seeing how theories about how people interact hold up once they are literally codified. I imagine there are a variety of theories that @ntnsndr is basing the design of E2C on.

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@rlombreglia I love the connection with ‘love’! I do think it comes from a love for your community, altruism, a public service. Maybe it is a bit “soft” of an idea for this space but I mostly think that’s because we have to translate the “soft” to the technical, and at the end of the day, it’s always about the “soft”. Culture, in my perspective, gets wrapped up in profits and growth (or as you’ve said, capitalism as a way of life.)

Vitalik held a talk about the difference between empericism and theory at EthDenver 2022. I found this a great example of the importance of the “soft” towards what we build. Are you conceptually sound in your idea? What are the impacts you’re intending to create? We can test almost anything, but are your foundational blocks intact in the abstract? I would actually employ our global community to slow down a bit and begin with the theory (the roots before the tree). I always think you’ll build better solutions in that method.

Thanks for engaging with me!

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This is a great initiative .
Would love to participate in building this fascinating ecospace.
Although I need more insight into this.

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